In a damning assessment of Avon and Somerset Police and Bristol City Council's conduct before Bijan Ebrahimi was killed in July 2013, the Safer Bristol Partnership (SBP) review found there had been a "collective failure" to properly address the 44-year-old's concerns.
Iranian Mr Ebrahimi lived on an estate in Brislington, Bristol and was "repeatedly targeted" with racist abuse by members of the public before being murdered by neighbour Lee James, who wrongly believed he was a paedophile who had been filming children.
James - who was jailed for life - also set his victim's body on fire.
While the report noted "there is nothing racist in the intentions or established policies and procedures" of the police or council, it refers to Sir William Macpherson's landmark report into the murder of Stephen Lawrence - which accused the Metropolitan Police of institutional racism.
The SPB's report stated that Mr Ebrahimi was "treated with disrespect and even contempt" by officers, which left him isolated and vulnerable.
It described the responses to his "racist victimisation" as "inappropriate" and accuses the police and council of "a distinct lack of understanding of his plight".
"There is therefore, based on the above definition from the Macpherson Report, evidence of both discriminatory behaviour and institutional racism on the part of Bristol City Council and Avon and Somerset Constabulary," it stated.
Mr Ebrahimi made 85 calls to the police between 2007 and the month of his death, but his allegations of racial abuse, criminal damage and threats to kill were not recorded as crimes on at least 40 occasions and he was eventually handed an anti-social behaviour order.
The report said officers had shown "hallmarks" of racial bias against him, with allegations against Mr Ebrahimi himself accepted "without objective investigation" or any consideration that they might be the result of "collusion" between genuine perpetrators.
The force's chief constable, Andy Marsh, has apologised to Mr Ebrahimi's family for failing him "in his hour of need".
"Some of these failings were systematic but it's important to acknowledge that the actions of a very small number of individuals had a catastrophic effect," he said.
"They fell well short of those qualities the public expect of their police service. We must ensure this cannot happen again."
Three police constables - Kevin Duffy, Helen Harris and Leanne Winter - and PCSO Andrew Passmore were all punished last year in connection with Mr Ebrahimi's death.
Duffy - who viewed Mr Ebrahimi as a "nuisance" and a "liar" - and Passmore were jailed for misconduct in public office, with the other two dismissed from the police.
The Independent Police Complaints Commission (IPCC) also produced a report on the case in July, ruling the force had repeatedly failed Mr Ebrahimi in the seven years before his death.
The SPB - made up of the local council, police, fire service and other community groups and organisations - accepted the findings of an initial review into his death in 2014.
Chairwoman Alison Comley said that the review had resulted in improvements to "the way we deal with anti-social behaviour and hate crime" and paid tribute to Mr Ebrahimi's family for their co-operation.
"As chair of the partnership, I am sorry for the collective failure of organisations to support Mr Ebrahimi as a victim of anti-social behaviour and hate crime."
Mayor of Bristol, Marvin Rees, added: "On behalf of Bristol City Council, we sincerely and wholeheartedly apologise for the failings in the council's treatment of Bijan leading up to his tragic death in July 2013."