The suspension of Lieutenant Colonel Joseph Morse marks the latest embarrassing setback for the US military as it battles a sexual assault crisis that has sparked calls for a radical overhaul of its judicial system.
The allegations were first reported by the Stars and Stripes newspaper and confirmed to AFP by military officers who spoke on condition of anonymity.
No charges have been filed against Morse, who supervises the army's special victim prosecutors that handle sexual assault, domestic abuse and crimes against children cases.
The female army lawyer has alleged Morse groped her and attempted to kiss her against her will.
The alleged incident took place in 2011 in a hotel room at a sexual assault legal conference in Alexandria, Virginia, officials said, before Morse was named to his current job.
Morse also served as the lead prosecutor in the criminal case against Staff Sergeant Robert Bales, who pleaded guilty to a mass murder of Afghan civilians in 2012.
"We can confirm that this matter is currently under investigation and that the individual in question has been suspended from duties, pending the outcome of the investigation," said a defense official.
Reports of sexual assaults in the US military jumped 60 percent last year, though officials say the surge shows victims have more confidence their cases will be taken seriously.
About 5,400 cases of sexual assault were reported in fiscal year 2013, compared to 3,374 reports in 2012, according to the Pentagon.
There have been a spate of high-profile sexual assault cases in the past two years, leading to a series of initiatives and prompting President Barack Obama to express outrage over the problem.
A proposal that would have stripped military commanders of the authority to decide if sexual assault cases should go to trial went down to defeat in the Senate on Thursday.
Top military leaders had strongly opposed the bill, arguing that it would have undercut commanders' ability to crack down on sexual assault within their units.
As senators debated how to quell the scourge of sexual assaults in the ranks, court-martial proceedings opened this week against a US Army general who is accused of forcing a female officer to perform oral sex against her will.
Brigadier Jeffrey Sinclair, a former deputy commander with the 82nd Airborne Division, pleaded guilty to adultery and several other charges Thursday but his lawyers said he will fight the sexual assault charges, media reported.
At a court room in Fort Bragg, North Carolina, Sinclair admitted to the affair with the captain and "inappropriate relationships" with two other women, as well as possessing pornography.
Under the military's legal code, adultery is prohibited.
Sinclair's defense team had said previously the general was ready to admit his affair with his subordinate.