Canberra sends asylum-seekers who try to reach the island continent by boat to the Pacific islands of Nauru and Papua New Guinea's Manus, where they are blocked from being resettled in Australia even if found to be refugees.
The Nauru facility -- which holds just over 400 men, women and children -- has been under scrutiny after allegations of thousands of incidents of abuse and self-harm were leaked to the Guardian Australia in August.
Amnesty's senior director for research Anna Neistat said interviews she conducted with more than 100 people, including asylum-seekers, refugees, and current or former detention centre staff, between July and October "paint a picture of people driven to absolute despair".
The rights group's report said there was an "epidemic of self-harm" among those held on Nauru, with nearly all the asylum-seekers interviewed reporting mental health issues that many said started after being transferred to the camp.
Contributing to their feelings of despair were inadequate medical care, exposure of children to abuse, and attacks and threats by some Nauruans outside the centre, it said.
Asylum-seekers on Nauru have been free to roam around the tiny nation since last year, no longer forced to remain locked up, but the report alleged that some who ventured outside the camp were attacked and raped.
"Australia's offshore processing regime fits the definition of torture under international law," Amnesty said in a statement, pointing to the refugees' "severe mental anguish" and the use of offshore processing as a deterrent.
Amnesty also accused Australia of operating the camp "behind a fortress of secrecy". Only a handful of journalists and refugee advocates, including Neistat, have gained access to Nauru in recent years.
Some of those interviewed by Amnesty said their time on Nauru was more difficult than the conflicts they had fled in Iraq and Syria.
"I cannot go back. But here I am dying a thousand times," said an Iraqi man, identified only as Edris.
"In Iraq, you get just one bullet or a bomb, and it's over, and here I am slowly dying from the pain."
Another, 19-year-old Ali Kharsa, who was held on Nauru for three years, said: "We fled Syria, but Nauru was the hardest thing I ever had."
The Australian government was not immediately available for comment.
But Canberra has strongly defended its tough policies towards "boatpeople" in the past, saying it has prevented deaths at sea and secured the nation's borders.
Nauru's government in August dismissed the leaked incident reports that asylum-seekers faced violence, abuse and humiliating treatment as "fabricated".
Just over 800 asylum-seeker men are held in the Manus camp, with Australia in August agreeing to close it following a Papua New Guinea Supreme Court ruling declaring that holding people there was unconstitutional and illegal.