Australian spinner Steve O'Keefe has been fined $20,000 for making 'highly inappropriate comments' while drunk at a Cricket NSW function.

O'Keefe, 32, has also been banned from playing for NSW in the Australian one-day domestic competition at the end of the year, Cricket Australia said in a statement on Friday.

According to News Corp, O'Keefe made several offensive comments, including remarks directed at a fellow Cricket NSW female cricketer.

The incident occurred after the Steve Waugh and Belinda Clark Medal at the Hilton hotel in Sydney last Saturday night.

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O'Keefe in action for Australia. Pic: Getty

O'Keefe reportedly infuriated some of the male teammates and can count himself lucky his Cricket Australia contract wasn't torn up.

It's not the first time the Test player has misbehaved under the influence of alcohol, having been fined $10,000 for offensive conduct at a Sydney hotel in August.

O'Keefe has apologised for his latest breach of Cricket Australia's code of conduct, saying he accepted his punishment while agreeing to undergo counselling.

"At an official Cricket NSW function, I became intoxicated and made highly inappropriate comments," he said.

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

"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."

A Cricket Australia spokesman would not give details on the nature of the comments, nor say when they were made.

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O'Keefe celebrates during his starring role in the First Test against India. Pic: AAP

Cricket Australia said it would continue to take a zero-tolerance approach to off-field misbehaviour.

"There is no time or place for unacceptable behaviour from any of our players in Australian cricket," CA's high performance manager Pat Howard said.

"We're extremely disappointed this situation occurred, particularly on the back of a previous incident.

"It now overshadows Stephen's on-field performance on the recent tour of India."

O'Keefe was one Australia's best bowlers during the four-Test series loss to India, from which the left-arm tweaker has recently returned.

He took 19 wickets at an average of 23.26, including match figures of 12/70 in the first-Test victory in Pune.

O'Keefe has played eight Tests since making his debut in 2014.

Last August, a week after arriving home injured from a Test series in Sri Lanka, he was fined and issued with an infringement notice by NSW Police for offensive behaviour and being an excluded person remaining in the vicinity of licensed premises.