Australians would be asked to vote on whether to enshrine an indigenous voice to parliament in the constitution under a proposal being considered by the major political parties.
The Referendum Council, which was tasked in 2015 with finding a way forward on constitutional recognition of indigenous people, recommended establishing the indigenous advisory body in a report released on Monday.
Council co-chair Mark Leiber told political leaders including the prime minister and opposition leader there were only two options available in pursuing a referendum.
"You either adopt our recommendation or alternatively you put constitutional recognition for Aboriginal and Torres Strait Islanders on the backburner for the moment and put it off maybe for the next 20 years," he said.
The council's proposal would establish a constitutionally-entrenched indigenous advisory body to the federal parliament, whose powers would be legislated.
The prime minister was non-committal when he sat down with the council, describing their recommendation as a "big idea" short on detail.
He and Opposition Leader Bill Shorten both vowed to give the proposal careful and thorough consideration.
Mr Leibler said some details of how the representative body would operate needed to be fleshed out before a referendum was held, but most could be finalised afterward.
Labor senator and Aboriginal leader Pat Dodson described the council's proposal as "a bit of a bolt in the dark", saying handing down a single recommendation made things pretty hard.
Senator Dodson believes the nature, function and purpose of the indigenous advisory body need to be clearly understood and explained to the public, to ward off any potential scare campaigns at a referendum.
He's concerned the country is going around in circles on indigenous rights, and is not convinced the Turnbull government will back the Referendum Council's proposal, believing bipartisanship is critical.
"I don't think we've got a clear line of sight as to whether any constitutional change is going to take place or not," he told the ABC's 730 program.
The council's suggestions follow months of consultation, which culminated in a summit of Aboriginal and Torres Strait Islander leaders at Uluru in May.
At the end of the gathering, they dumped a planned referendum for the recognition of indigenous as first peoples in the constitution, turning instead to the proposal for an advisory body.