Mexico's National Human Rights Commission said 22 people were executed by federal police during a confrontation on a ranch in the western state of Michoacan last year.
The commission had investigated the clash, which took place at a ranch in the town of Tanhuato in May 2015.
A total of 42 suspected members of a drug cartel died in the clash, as well as one police officer.
The government had said there had been no human rights violations.
The violence was thought to be drug-related and officials said it had been connected to a war being fought between two local drug gangs.
Police officials at the time said the victims were believed to be members of one of the cartels.
The commission established that 40 people were shot, one died in a fire and another was run over.
It also said that at least two people had been tortured by police and some bodies were moved to different locations and had had firearms placed in their hands.
Michoacan has become one of Mexico's most violent states because of the rivalry between local cartels reports bbc.com.