Ms Gilllard said that it is clear that too many children had been subject to sexual abuse in institutions and were not provided with a safe childhood.

Describing child abuse as a ''hideous, shocking and vile crime'', Ms Gillard said, ''I believe our nation needs to have this royal commission.''

Ms Gillard said to survivors of child sexual abuse, ''we want your voices to be heard. Even if you felt for all of your life that no one's listened to you.''

The prime minister said the Royal Commission would focus only on child sex abuse in institutional contexts.

''It will not deal with child sexual abuse in the family, it will also not deal with abuse of children which is not associated with child sexual abuse.''

Ms Gillard said the Royal Commission would provide advice and recommendations to the government ''in as timely a way as possible''.

When asked if church heads would be asked to appear before the Royal Commission, Ms Gillard said this was a question for the commission itself, before adding: ''I would be saying to the whole nation that we've all got an obligation to shine a light on what's happened in the past.''

The Royal Commission will be led by Justice Peter McClellan AM.  Justice McClellan is the Chief Judge at Common Law of the Supreme Court of New South Wales.

The government has also appointed five other royal commissioners.

They are: Bob Atkinson, the former Queensland police commissioner; Justice Jennifer Coate who served for 20 years as a magistrate and county court judge in Victoria; Robert Fitzgerald, a commissioner in the Productivity Commission; Professor Helen Milroy, who has extensive experience in child and adolescent health; and former Western Australia Democrat senator, Andrew Murray.

All commissioners will be appointed for three years and will provide an interim report within 18 months. The will meet over the phone on Monday and in person on Tuesday.

The terms of reference put an end date on the royal commission of December 31, 2015, but Ms Gillard said that could be extended.

Attorney-General Nicola Roxon said that there was a lot of preliminary work to do before hearings started.

"I don't think people should expect those hearings to start in a matter of weeks," she said.

The royal commission, first announced last November, will focus on ''systemic failures and issues'' in the response of organisations and institutions to the sexual abuse of children.

The Commissioners will be able to look at any private, public or non-government organisation that is or was in the past, involved with children. This includes government agencies  schools, sporting clubs, orphanages, foster care, and religious organisations.

The government did not specify how much the Royal Commission would cost.

Ms Roxon said the commission would have ''far-reaching powers'' that could enable them to override confidentiality agreements previously made regarding settlements, or to issue immunity from prosecution.

But she said the public needed to moderate expectations of those powers.

''It is important to remind the public this Royal Commission is not a police force, it is not a prosecuting body,'' she said. She also said that if anyone had an allegation about child sexual abuse, they should take it to the police.

The government was due to announce the terms of reference late last year, but before Christmas, it said that the terms of reference would not be finalised until the new year.

While royal commissions do not have the power to prosecute individuals, the government will ensure allegations of sexual abuse raised by the commission can be investigated and, if proven, prosecuted.

Fairfax Media understands the terms of reference will require commissioners to establish a process for the referral of cases to the police.

The terms will also give commissioners the power to set up a special ’’investigative unit’’, which will work closely with police to investigate and prosecute past abuses.

There have been about 200 formal written submissions on the commission’s terms of reference, plus about 600 emails.

The government said the submissions highlighted the need to tailor hearings to support victims through the process of preparing and giving evidence, and to report crimes to police.

Submissions also stressed the need for the commission to take whatever time was needed to investigate individual and systemic abuses properly, but said recommendations should be implemented quickly.

Ms Gillard announced the royal commission last year after scores of reports of sexual abuse within the Catholic Church and allegations of institutionalised cover-ups. But the government also came under pressure to broaden the inquiry beyond the Catholic Church.

Australia’s most senior Catholic, Cardinal George Pell, welcomed the announcement of the royal commission but accused the media of waging a campaign against his church.

The inquiry into institutional responses to abuse will not only look at perpetrators. It will also cover those who were ’’complicit’’ - for example by moving on alleged offenders - or those who, by ’’averting their eyes’’, committed acts of omission.

It will also examine police responses.