Australia Test spinner Stephen O'Keefe has been banned for next season's Matador BBQ's One-Day Cup and has been slapped with a $20,000 fine after making "highly inappropriate comments" in an alcohol-related incident last week.

Cricket Australia announced on Friday that O'Keefe had been sanctioned for a level two Code of Conduct offence after the comments while under the influence of alcohol.

The incident occurred after the official ceremonies concluded at the Steve Waugh Medal, the Cricket NSW end-of-season awards function.

No hearing was required after O'Keefe accepted the $20,000 fine from CA, while Cricket NSW imposed the additional penalty of excluding him from selection for next year's domestic 50-over tournament.

O'Keefe will also undergo further appropriate counselling.

"There is no time or place for unacceptable behaviour from any of our players in Australian Cricket, and we continue to take a zero-tolerance approach to this," said CA head of team performance Pat Howard.

"We're extremely disappointed this situation occurred, particularly on the back of a previous incident, and it now overshadows Stephen's on field performance on the recent tour of India."

It's the second time in less than a year O'Keefe has landed in hot water for an alcohol-related incident.

In August last year, O'Keefe was handed a $10,000 fine by CA and issued with an Infringement Notice by NSW Police for offensive behaviour and being an excluded person remaining in the vicinity of licensed premises after a night at the The Steyne Hotel in the beachside suburb of Manly.

That incident, which came after the left-armer had flown home from Australia's tour of Sri Lanka with a hamstring injury, led to him quitting alcohol for six months in a bid to return to the Test side.

In a CA statement, O'Keefe expressed remorse for his actions.

"At an official Cricket NSW function I became intoxicated and made highly inappropriate comments," the 32-year-old said.

"There is no excuse for this and I take full responsibility and offer an unconditional apology.

"I accept the sanctions imposed by Cricket Australia and Cricket NSW and welcome the chance to receive specialist counselling.

"I have a big challenge ahead and I am determined to meet it with actions, not just words.

"To all of the members of the cricket family I love and respect so much, again, apologies for letting you down."

Super SOK scales the heights with 12 in India

O'Keefe had a breakout series on the recent Qantas Tour of India, collecting 19 wickets at 23.26 to jointly lead Australia's wicket-taking charts along with fellow tweaker Nathan Lyon.

He claimed 12-70 during the first Test in Pune, the best-ever Test match haul by a visiting bowler in India, to lead Australia to their first win in the cricket-mad nation in more than a decade.