The Independent Police Conduct Authority says officers were justified in using a police dog on a gang associate who was angry at rival members visiting next door.
Officers were called to a property in Palmerston North in November 2012 after a call to say a man was threatening his neighbours with a firearm.
The IPCA says police had been called to the man's property to attend several serious incidents earlier involving threatening behaviour and weapons.
It says a further call was made saying the gang associate had a firearm and had quote "lost the plot".
The IPCA says the man suffered puncture wounds to his shoulder and arm when a police dog bit him ,dragging him to the front door.
It says the man was treated for his injuries and was taken to hospital.
The IPCA says the man's behaviour led the police to use the dog as a tactical option and says that use of force was justified.