The outfit for women depicts the aboriginal Disney character Pocahontas in a short, low-cut dress.
CBC's story Tuesday, which highlighted some of the negative reaction to the costume in Winnipeg, received 195 comments.
Tony Hugens, director of retail development at the Edmonton-based company, Halloween Alley, told CBC the decision was made Wednesday morning to pull the costume from all 37 stores across Canada, including here in Winnipeg.
Hugens said the company received numerous complaints about the costume from several stores. He said the stores are all family-run, and the company did not intend to offend anyone.