"I was not totally truthful when I denied the allegations I was having an extramarital affair," Atwell said at a press conference on Monday.
The admission was an about-turn from last week when the mayor categorically denied he was having an affair.
Atwell has been embroiled in controversy since the Times Colonist reported that police responded to a disturbance involving the mayor at the home of one of his campaign workers on Dec. 11.
After two days of silence, the mayor alleged last week he was struck from behind as he was exiting the house, by her fiancé. That's when he said he called 911.
"At no time did I commit any criminal act, but I do have concerns about the way the investigation was handled and how details of the incident became public," he said.
He has now filed a complaint with B.C.'s Office of the Police Complaint Commissioner.
Last week, Atwell also said he regretted not speaking to the media sooner to end speculation about his relationship with the woman, but blamed his lack of public relations savvy on his recent foray into politics.
Atwell had made headlines with his surprise victory in November over six-term incumbent Frank Leonard.
"I'm new as a politician. I'm newly minted. I'm kind of naive I guess in my original belief that I thought I had a private life and this was just a very small private episode between three people."
Alleged police harassment
At the press conference on Monday, Atwell also said city staff were instructed to place spyware on his computers and the Saanich police department has been harassing him.
"Police pulled me over not once, not twice, not three times, but on four separateoccasions," Atwell said. "On two instances, the officeradministered a road-side breathalyser test, which I believe was done without reasonable suspicion," he said.
He said his breathalysers blew a reading of zero.
Atwell said he has also complained to the police department about spyware placed on his work computer and has now set up an external email to correspond with his constituents.
"I became aware that a member of the district of Saanich's IT department had been instructed to place spyware on my computer and on a number of others," he said.
Saanich Police Chief Const. Robert Downie said he has not received any formal complaint from the mayor regarding the conduct of police officers.
"To date, Mayor Atwell has not informed me as to his concerns regarding harassment or information being leaked to the media regarding an incident that occurred on Dec. 11, 2014," Downie said.
"He did advise me of concerns that he had regarding software installed on his work computer at the Saanich Municipal Hall," Downie added, saying the matter had been reviewed and council would be advised of the outcome.