Despite hearing the officer's command, the two men fled and ran down a driveway near the shops, the report said.
The officer released his dog, which caught one of the men. However, the officer remained at the top of the driveway to try to locate the second man.
The officer then entered the driveway and saw him standing against a fence with the police dog biting his leg.
However, as the officer moved to release the dog, he slipped and slid down a small bank which delayed him from reaching the dog.
The bitten man was taken to Lower Hutt police station where he was examined by a doctor then taken to Lower Hutt hospital where he remained for eight days.
IPCA chairman Judge Sir David Carruthers said that in conducting its investigation, the authority found there were reasonable grounds for the officer to suspect that the two men were responsible for the attempted burglary.
The authority also found that releasing the police dog to chase the offenders was the only realistic tactical option that would allow the officer to catch and arrest the suspected burglars.
Once the officer reached the offender, the dog was removed as soon as possible, Sir David said.
Following the incident, the offender who was bitten by the police dog complained to the authority that he was punched in the face five to six times by the officer before the police dog was removed from his leg.
However, the authority found no evidence to support his complaint, Sir David said.