The Law Enforcement Conduct Commission recommended the officer, known as Officer B, be referred to ACT prosecutors and the colleague he bragged to – Officer C – be sacked.

The commission made the recommendations in a report released last week after secret phone taps caught Officer B joking about perjuring himself in court when giving evidence on an alleged drink-driving charge.

"F---in', I lied. I lied hard, too," Officer B said.

"Good on ya mate, I'm proud of ya," Officer C, his superior, said.

When giving evidence to the commission, Officer C initially said he did not recall the conversation, but later admitted he should have rebuked Officer B.

The two officers were investigated by the Monaro Local Area Command, which oversees officers from Jindabyne to Queanbeyan, just over the ACT border. The commission suppressed their names.

Officer B has since resigned from the NSW Police Force.

A NSW police spokesman said the force's professional standards command was investigating Officer C's conduct.

The commission began to investigate Officer B in June 2017 after the Australian Federal Police made a formal complaint to the NSW Police Force about the officer.

ACT police saw Officer B handing a small object to a known drug dealer at Canberra's Mooseheads nightclub on April 22, 2017, the report said. ACT police investigated the incident but uncovered no criminal offence.

But the federal police formally complained to NSW police in May, alleging Officer B had been involved in drug dealing and associated with known criminals.

The Monaro command investigated the complaint and made a finding of "not sustained" against the officer.

Despite this, in June 2017, the commission began its own investigation. Preliminary efforts showed Officer B was a known associate of drug dealers.

But it wasn't until February that the officer was caught in a lie when giving evidence on the alleged drink-driving matter.

He and another officer had pursued a driver from NSW into the ACT on April 28, 2017.

The driver had blown over the limit on a roadside breathalyser, but refused another breath test after ACT police arrived to complete the arrest.

In court, the driver pleaded not guilty and the driver's lawyer asked Officer B, in an informal discussion, under which law the officer had authority to arrest a driver in the ACT.

Officer B initially said he did not know. But later, under cross-examination, he had the right answer: the Road Transport Act.

When pressed, Officer B said the answer had come to him "just by thinking about it".

He insisted under oath that no one had told him the right answer but phone taps revealed he had actually asked another officer.

Later, over the phone, he told his girlfriend how panicked he had been.

"I'm just like, f---, I'm under oath here I can't lie, would I, I'm f---in' lying out of me teeth," Officer B said.

"You gotta prepare yourself, [Officer B]. Jesus," his girlfriend said.

The commission later learned that Officer B would be travelling to his home town on May 5, 2018 to see friends who had a known drug history.

The commission warned NSW police, who recalled the officer to command immediately for a random drug test two days later.

Officer B was suspended from the police with pay in May 2018 after he tested positive for illegal drugs.

He later told the commission he had been an infrequent user of cocaine and ecstasy since he was about 19 or 20, and had done a line of cocaine when he returned to his home town for the wake of a friend's mother.

He said his mates had given him drugs for free, which Officer B believed had been because he was a police officer.

The commission recommended the ACT Director of Public Prosecutions consider charging Officer B for perjury and making a false statement under oath.

A brief of evidence was being prepared for prosecutors. A NSW police spokesman said the force was considering the commission's recommendations.