An independent inquiry will be established to examine the handling of allegations made against Johnathan Davis, who was accused of having sex with a minor and an inappropriate, but not illegal, relationship with a 17 year old.
Deputy Chief Minister Yvette Berry said she had been speaking with Greens leader Shane Rattenbury and Opposition Leader Elizabeth Lee, and intended to seek tripartisan agreement on the form of the inquiry.
"Of course, this has been incredibly distressing news to find that a member of this Assembly has behaved in a way that is not at the level that the community or our government would expect," Ms Berry said.
Ms Berry, who is acting Chief Minister while Andrew Barr is on leave, said she was concerned the Greens did not alert Mr Barr's office as soon as they launched an internal investigation into allegations levelled at Mr Davis.
"I would have hoped that [Mr Rattenbury] had confidence in the Chief Minister's office that he could have or his party could have reported this serious issue to the Chief Minister's office," she said.
Ms Berry said Labor's issues were on what happened when the allegations were first brought to the party, rather than what the party had done following its internal investigation.
Ms Berry said the government intended to set up an inquiry with clear and concise terms of reference, examine what has happened and improve Assembly processes in the future.
"I don't want anything to drag out. As I said, this has been a very serious matter. It's traumatic. It's sad on many levels. I want to just focus on the issues at hand and try not to have it drag on for too long," she said.
Ms Berry said she would meet with Assembly Speaker Joy Burch later on Tuesday afternoon, and was having ongoing conversations with Ms Lee and Mr Rattenbury.
"Understandably, of course, the community has a range of questions that they want answered and we want a government that the community can have confidence in and that will be my aim going forward, getting agreement on an inquiry so that the community can have confidence in its parliament," she said.
Ms Berry said the relationship between ACT Labor and the Greens would be "bruised" as a result of the handling of the allegations made against Mr Davis.
"So we need to work through that. We're grown ups. I think we can work through that," she said.