The FBI organised "confidential human sources" to meet with former Donald Trump campaign adviser George Papadopoulos in an attempt to get him to repeat an incendiary claim made by Alexander Downer.
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The agency tried to entice Mr Papadopoulos with drinks and play to his ego, but it did not work.
The FBI's strategy to trick Mr Papapdopoulos was revealed in a much-anticipated 400-plus page report released on Monday by US Department of Justice Inspector General Michael Horowitz.
The Horowitz report reviewed how the FBI handled the probe into potential links between the Trump campaign and Russia.
It found the FBI was justified in opening the investigation and did not act with political bias, although "serious performance failures" by the FBI were found.
The report confirmed it was Mr Downer, the former Australian high commissioner to the UK, who was the spark that led the FBI on July 31, 2016 to launch Operation Crossfire Hurricane.
Mr Trump has slammed the investigation as a "witch hunt" and "hoax".
Mr Downer alleged Mr Papadopoulos told him during a meeting at a London bar in May, 2016, "the Trump team had received some kind of suggestion from Russia" it could release information "that would be damaging to Mrs Clinton (and President Obama)", the IG report states.
Hillary Clinton was running against Mr Trump to be US president.
Mr Papadopoulos denies telling Mr Downer the sensitive information.
The Horowitz report details how Mr Downer sat on the information until July 26, 2016, four days after WikiLeaks publicly released hacked emails from the Democratic National Committee.
Mr Downer reached out to a US government official in a "European city" about an "urgent matter" that required an in-person meeting and passed on Mr Papadopoulos' Russian dirt comment.
Former FBI Deputy Director Andrew McCabe told the inspector general's investigators that Mr Downer's information was a "tipping point" in opening a counter-intelligence investigation into Russia's attempts to interfere with the 2016 US election.
"Not only was there information that Russia was targeting US political institutions, but now the FBI had received an allegation from a trusted partner that there had been some sort of contact between the Russians and the Trump campaign," the report states.
In September 2016 the FBI laid a trap for Mr Papadopoulos by setting up scenarios similar to the London meeting with Mr Downer in the hope he would repeat the Russia comments.
A confidential human source, dubbed "Source 2", met with Mr Papadopoulos and offered him $US3000 to write a paper about "geopolitical dimensions in the eastern Mediterranean, including the energy sector and Russia's engagement with the Israelis".
The FBI recorded the meeting, but Mr Papadopoulos did not repeat Mr Downer's alleged claim.
Source 2 met up with Mr Papadopoulos later that evening for pre-dinner drinks to ask more "direct questions" about Russia, WikiLeaks and the Trump campaign.
Mr Papadopoulos responded: "Well as a campaign, of course, we don't advocate for this type of activity because at the end of the day it's, ah, illegal".
An FBI agent described Mr Papadopoulos' answers "as almost rehearsed".
The FBI arranged for another confidential human source, "Source 3", to probe Mr Papadopoulos about Russia.
When Source 3 asked if Russia was "playing a big game in this election" Mr Papadopoulos dismissed it and said the DNC hacking could have been "the Chinese, could be the Iranians" or supporters of Mrs Clinton's rival Bernie Sanders.
Mr Papadopoulos was charged by US Special Counsel Bob Mueller with lying to the FBI and last year was sentenced to 14 days in prison.
Australian Associated Press
