The incident resulted in an injury to a female patron.
In a statement on Wednesday, the club said: "The Lions take this matter extremely seriously and Proud has been suspended from the Lions as well as omitted from the AFL Indigenous All-Star squad pending completion of the club's investigation.
"The player is providing full cooperation to the police and club investigation and deeply regrets being involved in this incident.
"It is inappropriate for the club to make any further comment or take any further action until the matter has been fully investigated."
Proud, 20, has played nine senior games for the Lions after being drafted at No. 22 in the 2006 NAB AFL Draft. He played seven matches in 2008.
Last month the Lions fined forward Rhan Hooper for 'persistent and serious breaches' of his playing contract.
He had been handed a 28-day suspension by the club in December.
