It was "inherently dangerous" to sleep with an infant aged under 12 months but many parents were still unaware of the risks, Coroner John Olle said.
Mr Olle investigated four cases where babies died of SIDS after co-sleeping. Each was sharing a bed with a parent just before or at the time of their death.
"I am satisfied sharing a sleep surface with an infant is an inherently dangerous activity," he said in the Victorian Coroners Court on Friday.
"Caregiver/infant sharing of a sleep surface, beds, sofas, mattresses and armchairs, increases the risk of infant death from a fatal sleep accident and may increase the risk of infant death from SIDS."
Despite the risks, Mr Olle said many parents were unaware of the dangers or received inconsistent or inaccurate information on how their baby should sleep.
The coroner also said he was aware his findings could prove controversial and be viewed as anti-breastfeeding.
But he agreed with expert opinion provided to the investigation that sharing a bed with a baby while breastfeeding did not put the child at risk, provided they are returned to a cot for sleeping.
Mr Olle found babies should sleep on their back in a cot in the same room as their parents for the first six to 12 months of life.
This type of room sharing has been found to be protective against the risk of SIDS, he said.
Mr Olle recommended health professionals provide consistent and clear messages on the risks of co-sleeping to parents before and after the birth of a child.
He also said the Department of Health and the Department of Education and Early Childhood Development should align their health promotion advice with the existing SIDSandKids policy.
That policy says babies should sleep on their backs with their head uncovered, in their own cot, but in the same room as their parents for the first six to 12 months.
SIDSandKids bereavement services coordinator Jill Greene said about 30 babies died from sleeping accidents or SIDS in Victoria each year and parents must know the risks of co-sleeping.
"Parents are faced with so many struggles when they have a newborn," she said outside court.
"The newborn may have a cold, they're crying, they won't settle.
"Mum and dad are totally exhausted as well, so it's very easy to take baby to bed and sleep with them."
She said it was imperative the health system offered consistent messages to parents around the issue.