Mr Kennedy is not convinced of the case for legalising drugs, but is said to favour an open debate on an important subject which should not be "taboo", said a party spokesman.
The call for a Commission has been Lib Dem policy for many years and had been passed at annual conference.
Former leader Paddy Ashdown played down the conference decision, but the spokesman said Mr Kennedy was determined to speak out on issues that other parties were too timid to tackle.
Call for openness
Mr German said it was important that the issue was brought out into the open and wanted an investigation of subject which ahd been taboo for many years.
"I'm not saying I want to see a change in the laws, but I certainly want to see this matter debated in the open for people to have a look at what our policy is about in the matter of drugs.
"I think it's about time politicians put things into the public eye," he said.
'Unbelievable'
But shadow home secretary Ann Widdecombe attacked Mr Kennedy's proposals.
"Charles Kennedy clearly has yet to learn how a responsible party leader should behave," she said.
"This is an unbelievable first commitment which will alienate many of the people who put a cross by his name in the recent leadership election, and who voted Liberal Democrat two years ago."
A-Z of Parliament
Talking Politics
Vote 2001
Links to other UK Politics stories