Sgt. Robert Ralston, 46, who has been on the force for 21 years, had described the shooter as a black man with "cornrows" and a "mark or tattoo under his left eye" who had put a gun to his head, the Philadelphia Daily News reported Wednesday.
The April 5 shooting triggered a massive manhunt.
But when information Ralston provided didn't add up, investigators focused on the officer and Tuesday they said he admitted he shot himself in the left shoulder on purpose. His reason for doing so remains unclear, though the Daily News said some officers speculated he was upset that he had been transferred to a district with a higher crime rate.
"There is no excuse for what he did, period," Police Commissioner Charles Ramsey said. "So I don't really give a damn what his motive was. It makes no sense."
Ramsey suspended Ralston for 30 days with intent to fire him.
The newspaper said Ralston, who could not be reached for comment, will not face criminal charges because he was granted immunity in return for telling the truth, but will be expected to repay the city the cost of the investigation.
The Philadelphia Inquirer reported Ramsey labeled the case "a terrible and embarrassing chapter in our history."
The case angered John McNesby, president of the Fraternal Order of Police Lodge 5.
"The community has supported this city's police officers through so much, every time we lose an officer," McNesby told the Inquirer. "To have something like this come along that could possibly tear that down is a disgrace."