More than 10 million people were without phone and internet access for up to 14 hours on November 8.
The telco blamed a software upgrade for the network breakdown, while the fallout triggered the resignation of Optus chief executive Kelly Bayer Rosmarin last week.
Kelly Bayer Rosmarin resigned as CEO of the telco last week. (Lukas Coch/AAP PHOTOS)
After announcing plans to investigate the incident the day after the outage, Communications Minister Michelle Rowland has now outlined the terms of reference.
"We need to learn the lessons from this serious incident because no network is immune from technical faults or outages," she said.
The review has been designed to help industry identify where its processes need to be strengthened, and provide government advice on potential reforms.
It will advise on the functioning of triple zero and whether anything needs to be done to ensure its continued use during outage emergencies.
The government's response to and management of national outages will also be scrutinised.
The inquiry will also examine the adequacy of customer communication requirements, how complaints and compensation processes are dealt with and how other phone networks can be relied to assist during outages.
Former Australian Communications and Media Authority boss Mr Richard Bean has been appointed to lead the inquiry and will report to government by the end of February next year.
