A speeding truck crushed Gulabo in Rohtas district a few days ago when she was crossing a road after her handlers left her free without bothering to chain her, an official said here.
Gulabo was ranked a sub-inspector in the police dog squad.
Five policemen, including four handlers and a sub-inspector, were suspended after an inquiry report accused them of negligence.
It is probably the first time that Bihar Police took strict action after the death of a police dog due to negligence.
According to police officials, Gulabo was one of 45 highly trained dogs inducted in the state police. She was brought from Meerut in Uttar Pradesh.
The Bihar Police dog squad has 62 dogs across the state. Police plan to hike the number to 200.