Unmet demand for mental health call-outs is likely to increase, the report warns.
Police attended more than 70,000 events in the past year which involved a person having a mental health crisis or threatening or attempting suicide.
That was a 10 per cent increase on the previous year, the report stated.
"As a result, around half of all mental health call-outs were cancelled by police communications centres without us attending them due to even higher priority emergency events.
"Mental health-related events have also increased by 60 per cent over the past five years and are predicted to increase by a further 44 per cent by 2025."
Coster said while police would "love" to be able to respond to every call-out, officers needed to be focused on events that required their presence.
And police were not the best response to mental health crisis call-outs, he said.
"Whilst our people work very hard to do that, they are not mental health experts and so the most appropriate response can come from other places, and ideally would come from other places."
People at their "wits' end" often contacted police looking for help because it was a 24/7 service that dealt with emergencies, Coster said.
"Out of hours, the available option for people is often to contact police.
"I'm sure that in some cases they have case workers but those individuals may not be available 24/7 and so that crisis response, will often fall to teams who are based in hospitals ... police will often take people to emergency departments or to those crisis response teams to be assessed and be supportive, but obviously there's a lot of time involved in that process."
Coster wanted a separate, therapeutic response that addressed peoples' underlying mental health conditions.
Trials of an inter-agency team involving police, Wellington Free ambulance and Capital and Coast District Health Board that responded to emergency mental health calls in Wellington had been very effective, Coster said.
"We would love to have that kind of capability in place in every district, that's the conversation presently that we are having with the district health boards.
"With the structural changes happening in the health system that looks like a great opportunity to make sure that mental health crisis response is front and centre."
Coster said he had a "range of conversations" about a further roll-out of the inter-agency teams as part of the government's health reforms.