South Australia's Attorney-General Kyam Maher had requested a review of the SA Parole Board's decision in August to grant parole to Vlassakis, who pleaded guilty to four of the 11 murders between 1992 and 1999.
Parole Board review commissioner Michael David KC's decision on the review said there was "much to be said" for the behaviour of Vlassakis while in custody.
"However ... I am mindful of the legislative mandate, that is, the protection of the public that is of paramount concern," the retired judge wrote in his decision.
"These offences were very evilly premeditated by everyone, they were violent, gross, and committed over a substantial period of time.
"There were certain aspects of these crimes that could be described as disgustingly unusual."
He found that the Parole Board "underestimated the effect of the gravity of the criminal behaviour of Mr Vlassakis".
"I find that because of the gravity of the offending as described above, with the fact that this is the first occasion on which parole is available, to release Mr Vlassakis at this relatively early stage would be a risk to the community," Mr David wrote.
The review was held on December 5, but was closed to the media. Parole applications can be submitted yearly.
In October, Mr Maher said the board "erred in granting the prisoner's release on parole".
It failed to give proper weight to the safety of the community, the likelihood of the prisoner complying with the conditions of parole, the circumstances and gravity of the offences and any reports tendered to the board.
Vlassakis was 18 when he became involved in the killings in 1998 and was sentenced to life with a minimum term of 26 years, which expired in August.
Parole Board chief Frances Nelson previously said Vlassakis did not represent a risk to the community and would be sent to the Adelaide pre-release centre for up to 12 months to undergo a resocialisation process.
The attorney-general, Commissioner for Victims Rights Sarah Quick and Police Commissioner Grant Stevens had 60 days to apply for a review.
Vlassakis was a key prosecution witness against John Bunting and Robert Wagner, who were found guilty of 11 and 10 murders respectively.
The bodies of eight of their victims were found dismembered in barrels inside a disused bank vault in Snowtown, north of Adelaide, in 1999.
Accomplice Mark Ray Haydon, 66, was released on parole in May 2024 to live in the community under strict supervision.
There were 12 victims in the case, but a murder charge over one of the deaths was dropped due to a lack of evidence.
Strict suppression orders remain in place regarding identification of Vlassakis and prevent any images or descriptions of him being published.
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