The Australian government has spent 9.6 billion Australian dollars (7.2 billion US dollars) on its asylum policy since 2013, Save the Children said Tuesday.
A report conducted by the charity and UNICEF forecast that the costs, which include spending on mandatory detention, boat returns and offshore processing, could increase by a further 5.7 billion Australian dollars over the next four years.
The projection did not take into account legal costs incurred by challenges to asylum decisions or compensation payments.
The report also said offshore processing in Nauru and Papua New Guinea cost 400,000 Australian dollars per asylum seeker per year, while onshore detention in Australia cost 240,000.
An estimated 1,300 asylum seekers are currently languishing in the two offshore detention centres in the Pacific.
Since 2013, Australia has intercepted all asylum seekers travelling to the country by sea and either turns their boats back or processes their claims offshore.
"Australia's immigration policies are expensive, inhumane and blunt," Paul Ronalds, chief executive for Save The Children Australia, said in a statement.
Nicole Breeze, UNICEF Australia's policy director, said the report highlighted the failings of policies adopted by successive Australian governments.
"It's time to replace deterrence with mutual commitment and co-operation with partners across our region," she said.
In August, Papua New Guinea and Australia agreed to close down the detention centre in Manus Island after it was deemed "illegal" by PNG's Supreme Court.
In depth coverage
Rights groups on Wednesday strongly criticized the Australian government's policy of operating offshore detention centres, after leaked internal reports from Nauru revealed widespread abuse, particularly against children.
The Australian government has rejected accusations levied by two rights groups that it overlooks the "systematic" abuse and neglect of asylum seekers it sent to the island of Nauru in order to discourage further illegal arrivals.