The Australian Institute of Health and Welfare report says the biggest contributing factor is the rising rate of people diagnosed with Type 2 diabetes.
End stage kidney disease is the most severe form of chronic kidney disease. Sufferers need dialysis or a transplant to survive.
The Institute's Dr Lynelle Moon says the number of Australians receiving dialysis or kidney transplants has tripled since 1991 and is now approaching about 20,000 people.
She says there are a number of reasons for the substantial rise.
"The increase in diabetes is likely to be playing quite a significant role, as diabetes is a key risk factor for kidney disease and we can see that in the numbers," she said.
"In 1991, about 13 per cent of new cases were due to diabetes, but that's increased to 33 per cent in 2009.
"One of the main reasons for the increase in diabetes is the increase in obesity in the community.
"So there's some types of kidney disease that aren't preventable, but certainly in terms of the increase that we're talking about, a lot of that increase is preventable."
Kidney Health Australia's medical director, Dr Tim Mathew, says the figures are worrying, and he also highlights diabetes as the biggest contributing factor.
"Diabetes is out of control. Diabetes Awareness Week, a week or two ago, made projections of a doubling of a number of Australians with diabetes, we would agree with those figures.
"About half of those people who get type 2 diabetes actually have kidney disease."
Dr Mathew said end-stage kidney disease is one of the most serious and costly health problems in Australia.
"The average cost is something like $55,000 per patient per year. It varies, depending on the type and where it's done, but it is hugely expensive by any criteria and of course, it goes on," he said.
"It's not a one-off chemotherapy course that might cost $80,000, it's repeating costs for the duration of a person's life.
"We're spending $1 billion a year at the current time on the existing dialysis programs. That number is projected to almost double over the next decade.
"Most other conditions, including heart disease, chronic lung disease, stroke, some or most forms of cancer, are in fact decreasing substantially their mortality, their contribution to the burden of disease here in this country.
"Kidney disease is in that brief summary as the only condition singled out that is increasing", Dr Mathew added.