Indigenous communities could be hunting the dugong to extinction, a report commissioned by the Federal Government has found.

The report by environmental scientist and dugong expert Helene Marsh shows up to 1,000 dugongs are caught using traditional Indigenous methods each year.

Federal Fisheries Minister Ian MacDonald says that is not sustainable and the Government will try to reduce the number to 100 a year.

"We are going to further investigate it under the biodiversity conservation Act but we do want to work very cooperatively with island and Indigenous leaders to try and stop that mass slaughter of these animals," he said.

"If we don't do something, there will be catastrophe."

"I think many of the island leaders know that themselves."