The brand also apologised for social media posts criticising Chinese people, saying it had been hacked.
The furore is a setback for one of Italy's best-known fashion brands in China, where rivals from Louis Vuitton of LVMH to Kering's Gucci are vying to expand.
Following massive public debate in Chinese social media, several major Chinese online shopping sites shelved D&G items, while local A-listers refused to attend the Shanghai catwalk show.
According to data compiled by Bloomberg, Chinese consumers spent over $100 billion on luxury purchases a year ago - one-third of the global total.
The Italian firm cancelled its fashion show in Shanghai earlier this week over the issue.
Screenshots then surfaced of what appeared to be a private message sent by co-founder Gabbana's via his Instagram account referring to China as "a country of s***", among other vulgar comments.
The controversy arose after Dolce & Gabbana posted short clips on Instagram earlier this week showing a woman eating pizza and spaghetti with chopsticks that some deemed culturally insensitive.
While Gabbana later claimed his Instagram account and the official D&G Instagram account had been hacked, the backlash from Chinese celebrities, modelling agencies, government authorities and consumers has been swift. 'We will never forget this experience and lesson, and this sort of thing will never happen again'.
Dolce & Gabbana Dropped by Multiple Retailers Following Racism Allegations
They finish by saying "sorry" in Chinese.
The Communist Party Youth League, the youth wing of the ruling Chinese Communist Party, said on Weibo "we welcome foreign companies to invest and develop in China. companies working in the country should respect China and Chinese people".
The brand said they have "nothing but respect for China and the people of China", and that they were investigating the events.
The gaffe is not the first by Dolce & Gabbana in China, even as it pushes to increase its appeal there.
On internet giant Alibaba Group Holding Ltd's Tmall shopping portal, a search for D&G in both English and Chinese returned no results, while a check of JD.com's site also produced no D&G items.
Leading Chinese e-commerce platforms Alibaba and JD.com were joined by Suning, VIPshop, Secoo and Netease in dropping the Italian fashion house's products from sale.
Celebrities including "Memoirs of a Geisha" movie star Zhang Ziyi criticized the brand, while singer Wang Junkai said he had terminated an agreement to be the brand's ambassador.
"We are very sorry for any distress caused by these unauthorised posts". In April, the #DGLovesChina campaign was criticised for depicting Beijing as impoverished, and in 2012 the brand made headlines when they stopped fans from taking photos outside their Hong Kong flagship store in order to protect intellectual property. "I don't want a Japanese designer to start designing Dolce & Gabbana".
"They're bowing their precious heads to the renminbi (yuan) then", one Weibo user commented on the apology post.