China stood at second position with number of permanent migrants falling from 29,546 to 25,509 last year.
O'Connor said that the Asia region was becoming a leading source for permanent migration to Australia according to the new migration trends in Australia.
The report contained comprehensive analysis and commentary on migration activity for 2011-12, and provided clear picture of substantial changes in the origins of Australia's migrants, reflecting the trend towards an Asian Century.
India and China were the two main source countries of permanent migrants, an official statement said. "Seven of the top 10 source countries in 2011-12 were located in the Asian region," O'Connor said, adding, "Between 1996 and 2011, Australia's overseas-born population grew by more than 40 per cent to reach six million".
This was more than double the rate for the Australian-born population and is essential in addressing the demographic challenges of an ageing population, he said.
"With the government's strong emphasis on skilled migration, this sort of growth is also crucial to ensuring depth in Australia's labour force," O'Connor said, adding that patterns of migration were also changing.
"In 2011-12, half of Australia's skilled migrants applied while they were already living in Australia on a temporary visa. This was more than twice the rate of a decade earlier and reflects a growing trend of migrants seeing what Australia has to offer before making a commitment to settle permanently," O'Connor said."There is also clear evidence of Australia's commitment to international refugee protection. By granting more than 13,700 humanitarian visas in 2011-12, Australia continued to earn its place as one of the top three resettlement countries in the world, along with Canada and the US," he said.