Mr Cotter said in that situation, police would have been justified in using lethal force against the man and armed police were on their way to the scene.
"The police dog handler's actions were brave in the circumstances, obviously everything unfolded very quickly and he took appropriate action to keep himself and the public safe."
The police dog was not injured during the incident, he said.
"Link did a good job."
Swinging a sword in the middle of the night along a rural road was an "odd thing" to do, he said.
The Independent Police Complaints Authority would investigate the incident, Mr Cotter said.
"Whenever a person is injured because of police actions...there is an IPCA investigation that takes place and that will occur in this place."
A 31-year-old man has been charged with assault, resisting police and possession of an offensive weapon.
He was due to appear in Lower Hutt District Court on Thursday.