The atlas found Australia’s big towns and cities are getting bigger, while small rural communities are getting smaller.
The rural population is declining by just under 1pc a year, with a 2pc annual decline in the number of children.
Rural communities are ageing faster, and have a higher average age, than the rest of the country.
"The social circumstances of many people, communities and towns have changed as the movement of young people and families to regional and major urban centres for better employment and education opportunities has accelerated," the atlas found.
Major cities grew by 8pc in the five years to 2006, and coastal towns and cities boomed too.
Queensland was the epicentre of coastal growth, particularly the Gold Coast, Maroochydore and Cairns. Interstate, Geelong in Victoria and Newcastle in NSW grew strongly.
Almost two-thirds of Australians live in capital cities.
Agriculture Minister Tony Burke said the report confirmed that people, especially young families, were leaving smaller rural communities.
However, he focussed on the positives as he launched the report in Melbourne Thursday, pointing to high labour participation rates, vocational training take-up and home ownership in rural areas.
"These figures reinforce what we already know about people living in the bush – they’re resilient, highly skilled and passionate about their communities," Mr Burke said.
The report found a relatively high proportion of young people in rural areas are in school, and the number of people without qualifications had fallen sharply.
People in rural areas are more likely to have a vocational degree or certificate than the national average.
The atlas is also interesting news for single women in the bush – there are 25pc more young males than females in rural areas.
Cities and regional centres had more women than men.
The atlas, called "Country Matters, a Social Atlas of Rural and Regional Australia", is prepared every five years for the Department of Agriculture, Fisheries and Forestry. It is used by the government to develop policies and programs.