A recent report revealed Liberal upper house MP Peter Poulos leaked intimate Penthouse modelling photos of Hawkesbury MP Robyn Preston to fellow Liberal members, according to the Daily Telegraph.
The photos were reportedly sent via email about five years ago, when the pair were locked in a preselection battle for the hotly-contested seat of Hawkesbury.
Ms Preston was eventually endorsed as the Liberal candidate, winning the seat at the 2019 election.
Mr Perrottet called Mr Poulos' actions "incredibly inappropriate" on Tuesday, adding he talked with the MP to remind him of his responsibilities.
However, Mr Poulous has retained his place on the Liberal upper house ticket at the upcoming election.
"People make mistakes," the premier told reporters when asked about Mr Poulos on Wednesday.
"No one is perfect. I've made a number of mistakes in life.
"The main thing is when you do (make mistakes), you stand up, you take responsibility for it, you apologise.
"That's what Peter has done."
Ms Preston appeared with the premier, telling reporters she and Mr Poulos were now good friends and she no longer wished to speak about the incident.
"This is something that's been brought up for decades now and I wish that we would respect the the opportunity to put it to bed," she said.
"Peter rang me and personally apologised and he was very remorseful.
"Peter and I are great mates.
"We have been in the party and we have a great following as friends we support each other along the way in our journey in politics."
Labor's leader in the upper house Penny Sharpe says Mr Poulos' behaviour was unacceptable and it was up to the Liberal Party to deal with it.
"If the question is whether he's sharing inappropriate images of a female member of parliament, of course that's inappropriate and should not be tolerated," Ms Sharpe said.
AAP has contacted Mr Poulos for comment.
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