The way child protection is approached in England needs to “change fundamentally”, the Child Safeguarding Practice Review Panel said.
Its national review found that the fatal abuses suffered by Arthur, six, and Star, 16 months, "are not isolated incidents", but reflective of wider problems with poor information sharing and weak decision-making.
Concerns raised by their wider family members were "too often" disregarded and not properly investigated, the review said.
Professionals were increasingly kept at arms length by those perpetrating the abuse, and they failed to identify a "pattern of parental disengagement and avoidant behaviour", the report also found.
It recommends dedicated multi-agency teams staffed by experienced child protection professionals be set up in every local authority area to investigate allegations of serious harm to children.
And the Government should establish a national child protection board to better co-ordinate child protection policy.
In a foreword to the report, review chairwoman Annie Hudson said the current safeguarding system is not broken, but there is too much ambiguity and inconsistency which does not serve children, their families or professionals well.
Existing multi-agency safeguarding arrangements "are not yet fit for purpose everywhere" she added.
The review was commissioned in December 2021 by Education Secretary Nadhim Zahawi following the deaths of Arthur and Star to look at what could be done to prevent things from going so "horrifyingly wrong" in future.
The panel interviewed just under 80 professionals in Bradford, Birmingham and Solihull; the children's family members, including Star's mother and her mother's partner; and drew on 1,500 rapid reviews of serious incidents since it was formed.
It found that child protection work is inherently complex, but the current system does not give professionals the best opportunity at cutting through this complexity "to get to the truth of what life is like for children".
It identified a reliance on quickly pulling together a team from overstretched agencies every time there is a child protection concern, which is "certainly inefficient and often ineffective".
The review noted the importance of challenging assumptions and biases relating to culture, ethnicity, gender and sexuality when safeguarding children.
It said the role of women in perpetrating abuse may have impacted on how professionals perceived the risk to children, "given societal beliefs about women as caregivers".
Arthur was murdered in June 2020 by his stepmother Emma Tustin at their home in Solihull. His father Thomas Hughes, 29, was found guilty of his son's manslaughter.
The review said a judgment seemingly became fixed early on that Mr Hughes was a "protective father", which was reasonable at the time but was never challenged when circumstances changed.
Concerns about Arthur's bruising raised by family members were not taken seriously, photographs of the bruising were not shared between agencies, his voice was not always heard and too many assessments relied on his father's perspective, it found.
Star was murdered by her mother's girlfriend at her home in Keighley, West Yorkshire, in September 2020. Star's mother Frankie Smith, 20, was found guilty of causing or allowing the youngster's death.
An explanation that concern from a family member might have been malicious and rooted in a dislike of her mother's same-sex relationship was "too easily accepted", the review found.
The review found that Bradford children's social care service was "in turmoil" in 2020, with a high turnover of social workers and a high volume of work affecting quality and contributing to assessments that were "too superficial" and did not address repeated concerns from family members.
Ms Hudson told the PA news agency there are "fundamental faultlines" in the system that need to be addressed.
She said: "We're really clear in our report that the issues that we saw there are also issues that we've seen in other instances, and that we believe that the way the system is set up, and the conditions in which practitioners are having to work and make decisions, actually makes it very difficult sometimes for them to really know what was going on and to really work together effectively to protect children."
Mr Zahawi thanked Arthur and Star's families for their contributions to the report, and said: "We must waste no time learning from the findings of this review - enough is enough.
"I will set up a new Child Protection Ministerial group, a first and immediate step in responding to these findings, before setting out a bold implementation plan later this year to bring about a fundamental shift in how we support better outcomes for our most vulnerable children and families."
Sir Peter Wanless, NSPCC chief executive, said Arthur and Star's deaths "have left a lasting scar on the nation".
He said: "It is heart-breaking that it had to take these tragedies to shine a light on the shortfalls in the child protection system.
"Now, we must ensure the memory of Arthur and Star acts as a catalyst for the fundamental changes necessary to prevent further deaths.
"This review lays bare an all-too-familiar story of a system struggling to cope. Social workers, police, health practitioners and teachers, however hard they are working as individuals, know they cannot do this alone."
Nick Page, chief executive of Solihull Council, said Arthur's murder "devastated" the community.
He said he is proud of the dedicated and caring social workers in the area, but said it "can't be right" that abuse and threats directed at them over the last six months have forced some to leave their homes.
He said: "Now is not the time for blame but it is most definitely the time for learning and sorting."
In response to the review, West Midlands Police's Assistant Chief Constable, Claire Bell, said the force owes it to Arthur "to not miss a single opportunity to learn from what happened to him so we can better protect children in the future".
"“The report by the national Child Safeguarding Practice Review Panel makes a number of important local and national recommendations that will help police and partners to work more effectively together.
“We will continue to work with our partners to act on these recommendations, building on the progress we have already made to improve safeguarding for children across the West Midlands."
Asst Chief Constable Bell said that work includes improving the quality and management of information held on the force records management system to enable us to identify and manage risks more accurately and improve our ability to prevent and investigate crime.
“We know there is still more to do and we are determined to work collectively with partners to act upon the panel’s recommendations and make the changes needed to better safeguard children in the future," she added.