The findings of a major task force, published in the journal Lancet Psychiatry today, found people suffering mental illness also faced a number of "drastic" physical health challenges too.
As a result, many could experience a significant gap in life expectancy of up to 20 years, according to Joseph Firth, chair of the commission that led the study and a senior fellow at the NICM Health Research Institute at Western Sydney University.
"This applies across a broad spectrum of different mental health conditions," Dr Firth said.
"We see elevated rates of cardiovascular and metabolic diseases in people with depression, anxiety, schizophrenia, even people with alcohol and substance abuse disorders.
"It's not only a gap in life expectancy but a gap in the quality of life and the physical health burden that affects people with mental illness right across (ages), including people of quite a young age."
The extent of the life expectancy disparity had grown over time, Dr Firth said, and continued to deteriorate.
The risk of major physical health problems as a result of mental illness is "double or threefold" compared with people who don't suffer mental illness.
But on the flip side, there's also evidence poor physical health could cause adverse mental health conditions, Dr Firth said.
"Rates of diagnosis of mental health issues are on the rise in young people. It does seem linked to rising rates of obesity in young people. And the other way, we know that poor mental health does cause physical illness for multiple reasons."
The report found health issues like obesity, diabetes and cardiovascular disease were most common.
"It's these which usually drive the premature mortality in these populations when we're talking about physical health," Dr Firth said.
Simon Rosenbaum, a fellow at the National Health and Medical Research Council at the University of New South Wales, led the lifestyle component of the study and said early intervention was the key to tackling life expectancy inequality.
"We know what works in the general population in terms of lifestyle-related interventions to reduce the burden of chronic disease in things like diabetes and health diseases," Dr Rosenbaum said.
"We're not applying that to people living with mental illness at the moment. Part of it is redefining how we think of standard mental healthcare."
In vulnerable populations - especially young people with mental illness - complementing traditional treatment with physical health interventions could help reverse trends, he said.
"If you think about a young person who turns up to treatment, they see a psychiatrist and psychologist. The evidence is very clear that having non-traditional services - exercise physiology, allied health, dealing with smoking cessation - should be a routine part of dealing with mental health treatment," Dr Rosenbaum said.
The report also highlighted the contribution of some psychiatric medications that could have a range of physical side effects, including lethargy and food cravings.
"If we're serious about changing lifestyle, we need to take these things into account ... when prescribing medications," Dr Firth said.
The health system has existing infrastructure in primary care networks that could be better used to help narrow the life expectancy gap.
People with physical illnesses are regularly referred to dietitians and exercise physiologists as part of efforts to intervene in poor lifestyle practices.
Dr Rosenbaum said it's "entirely underitilised" in the mental health space at the moment.
"It's partly due to awareness and education but also a lack of knowledge of where providers are," he said.
"We need to make sure these interventions are offered as part of standard care.
"The idea of dualism, the separation of mind and body, is absolutely gone. We need to be integrating these strategies from a really early stage."
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