The authority chair, Judge Colin Doherty, said the rear passenger spat at police, while the front passenger got out of the car and confronted officers. Both passengers were arrested during the incident.
Back up was called and a dog handler and other officers arrived at the scene.
After about 15 minutes, two officers tried to pull the driver from the car, however he continued to resist and was verbally abusive.
The dog handler then commanded his dog to bite the driver.
The dog bit the driver's arm and pulled him from the car.
The driver, who was then taken to the ground and handcuffed, suffered puncture wounds to his left bicep, facial grazing and other scratches and bruising.
The driver complained about the use of the dog, and that he was pushed to the ground causing him to hit his head.
The authority found that using the police dog was unjustified in the circumstances.
"We also found that the dog handler kicked the driver on his arm and on the side of his body while he was on the ground, and this was not justified," Doherty said.
"In this case, the driver had been pulled over for a driving offence and did not pose a threat to the public with the car immobilised and surrounded.
"He was being physically resistant and verbally aggressive but sufficient officers were present to deal with him and the two passengers.
"Other tactical options, such as continued negotiation or pepper spray, were preferable to using a police dog capable of inflicting serious injuries.
"To use a police dog in these circumstances was an overreaction."
The authority completed its investigation into this incident in July 2021 but delayed the release of its public report until after the conclusion of related court proceedings.
Acting Southern District Commander Mike Bowman accepted the findings and said the officer involved had pleaded guilty to a charge of injuring by an unlawful act.
"Any officer whose actions are potentially criminal will be thoroughly investigated and held to account.
"There remains an ongoing employment investigation, and for that reason we are not in a position to comment further at this time."