The inquiry into the process undertaken by the State Services Commission into Wally Haumaha's appointment as new Deputy Commissioner of Police will look at what information they held about him before he was given the role.
Speaking at a press conference, Acting Prime Minister Winston Peters told media the Haumaha would not be stood down while the inquiry took place.
Peters announced the inquiry earlier today following a Herald investigation which revealed Louise Nicholas' anger at his promotion.
Haumaha was friends with the men she accused of raping her and continued to support them after the scandal broke.
The terms of reference into the inquiry would focus on the State Services Commission's appointment process and whether all relevant information was appropriately provided to or gathered by them during the appointment process and if not, why not.
If all the relevant information was known to the SSC, whether it was provided to the appropriate ministers and if not, why not.
Further terms of reference were urgently being prepared and would be released within the week.
The Government wanted a comprehensive report, he said.
"We are not here to run a cover up, but to get to the facts and get all of the evidence out."
The process would be overseen by internal affairs minister Tracey Martin who would appoint a qualified and independent person to undertake the inquiry within the next few days.
Peters said Martin was chosen because it would was have been inappropriate for the minister of Police or the minister of the SSC to be leading it since it was that department that was being investigated.
Peters said Haumaha would not be stood aside because it was not the nature of the offence that was of concern, but the process of his selection.
He also said reports that Haumaha was a New Zealand First candidate in 2005 were false and he did not believe there was a conflict. He said he had no involvement with Haumaha since he pulled out of the selection process to be the Rotorua candidate and had no idea what his political affiliations were now.
"We need to move on with this question time because we are not going to contaminate the inquiry that's coming by answering questions that maybe raised by them."
The report was expected to be made public once it was completed.