The Australian Broadcasting Corporation, which broke the story in February of Zygier's arrest, detention and suicide in a Tel Aviv jail, said his recklessness forced Mossad to abort the sophisticated mission.
The Israeli government went to extreme lengths to cover up the existence of Zygier, known as "Prisoner X", and the reason for his imprisonment. German magazine Der Spiegel previously claimed he passed secrets to Hezbollah.
ABC said Israel gagged his existence due to the sensitive nature of the operation he compromised.
They were identified as Zachary Baumel, Yehuda Katz and Tzvi Feldman, who died in Lebanon's Bekka Valley.
More From This Section
Recovering the remains of soldiers killed in action is of extreme national importance to Israel with only only six servicemen still missing from all the conflicts they have been involved in, ABC said.
The broadcaster interviewed a Lebanese man, Ziad Al Homsi, a former commander of Lebanese forces in the Bekka Valley, who said he was recruited by Mossad in 2007 after being lured to China for a convention.
Al Homsi said he suspected Mossad was involved, which was confirmed over five trips to Thailand to meet with other operatives.
"After one year of meeting with them, at the last meeting they informed me about the location of the corpses, exactly where they were," he said.
The agents wanted Al Homsi to arrange to dig up the remains and leave them for someone else, according to the report, which also cited a former Mossad agent.
The broadcaster said Zygier, who was raised in Melbourne but moved to Israel about a decade before his death, was responsible for blowing his cover.
It said that in 2008 he was desperate to please his spy masters at Mossad and embarked upon a rogue mission to make contact with a Hezbollah agent.