The AU's Commission of Inquiry on South Sudan lists a string of abuses, including forced cannibalism and dismemberment, according to the report published late yesterday.
It also presents testimony that the ethnic violence, which began in the capital Juba in December 2013, may have been premeditated.
"There are reasonable grounds to believe that acts of murder, rape and sexual violence, torture and other inhumane acts... Have been committed by both sides to the conflict," the report said.
"The Commission believes that war crimes were committed in Juba, Bor, Bentiu and Malakal," the 342-page report read, referring to key towns in South Sudan.
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The report called for an internationally backed, African-led court to try those responsible for the violence.
It said a "highly confidential list" of "possible alleged perpetrators" will be submitted to the AU's Peace and Security Council.
Among the most shocking of many acts of "extreme cruelty" identified in the report were claims of "draining human blood from people who had just been killed and forcing others from one ethnic community to drink the blood or eat burnt human flesh".
But publication was delayed as African leaders and AU officials feared the report might undermine peace talks. A peace deal was finally signed by President Salva Kiir and rebel leader Riek Machar in August this year, but a ceasefire has been repeatedly broken.