The Yorta Yorta grandmother fell and suffered a head injury while in the Castlemaine police station after she was arrested for being drunk on a train in December 2017.
She died two weeks later."Ms Day's death was clearly preventable had she not been arrested and taken into custody," coroner Caitlin English said on Thursday.
Under the totality of evidence an "indictable offence" of negligent manslaughter "may have been committed", Ms English found.She referred the matter to the director of public prosecutions.
It comes after the coroner found V/Line train conductor Shaun Irvine made a "snap decision" to label Ms Day as "unruly" and request police attendance.
"It is open to me to draw the inference that Mr Irvine's decision-making was influenced by an unconscious bias and immediately deciding Ms Day was unruly ... without considering other options," she said.
"I find the decision to define her as unruly and to call for police rather than pursue other options has been influenced by her Aboriginality.
"But she did not find the police officers who took Ms Day from the train platform and arrested her showed systemic racism in their decision.The decision to arrest the Aboriginal woman was made under time pressure, Ms English said.
"I am not satisfied there is any evidence to support a finding that Ms Day's Aboriginality played a role in this decision-making.
"However, she found once the grandmother was in the Castlemaine police station they did not consider the risk of falls.Ms Day's family had called for a criminal investigation into her death.
They also wanted the coroner to acknowledge that systemic racism and unconscious bias were central to her death.
The inquest lasted two weeks and heard from the police officers who arrested Ms Day, paramedics, railway staff and others.
Her death prompted the Victorian government to abolish the offence of being drunk in public.
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