The report called for extensive safety checks to be implemented, or else, the use of nanomaterials may actually kill people in the future.
The experts, analysing the effects of the technology, fear that when nanomaterials escape into the environment they can damage people and wildlife.
However, it may be too late before the effects become visible.
Already, general usage materials such as asbestos, leaded petrol, CFCs and cigarettes, were introduced without giving an eye to the potential damage.
But now the commission fears nanomaterials will prove similarly dangerous, and have thus called for stricter safeguards on nanotechnology
The report concluded by saying that threats posed by nanomaterials can only be identified and countered by introducing rigorous safety systems, including widespread monitoring and intensive research.
Already, there are about 600 different products using nanomaterials around the world and around 1,500 have been patented.
Professor Sir John Lawton, chairman of the commission, admitted that till date no evidence has been found to show damage has been caused to human health or the environment by nanomaterials.
But he claimed that apart from its benefits, the technology could also turn out to be harmful for living beings.
"The rate of innovation in this sector far outstrips our capacity to respond to the risks. There is an urgent need for more research and testing of nanomaterials," Times Online quoted Lawton as saying.
Nanomaterials manufactured for use in products were considered by the Commission to be those that measure one to 100 nanometres long.
Professor Susan Owens, of the University of Cambridge, said: "If we don't do anything and we leave it, then things manifest themselves in 10 to 15 years' time. By then the technology is so embedded in society it's very difficult to deal with it."
The report, tiled 'Novel Materials in the Environment: the case of nanotechnology', rejected an outright ban on the technology because of the huge potential benefits.