Both the newspaper, Canada's largest First Nations paper, and the Liberal Party say the ad copy was written by a salesperson at the newspaper and approved by one of Murray's staffers. They both say Murray never saw the copy.
The ad features a large photo of a smiling Murray, next to copy congratulating "all 2015 aboriginal high school graduates."
"Sobriety, education and hard work lead to success," the next line says.
Jacqui Gingras, a federal NDP candidate in British Columbia, seems to be the first person to have pointed out the ad on Twitter, posting it with the hashtag "racistmuch."
Murray was quick to respond on Twitter, apologizing for the "completely inappropriate" ad published under her name.
Len O'Connor, one of the managing editors of First Nations Drum, said the paper is taking responsibility for the ad.
"She's very supportive of First Nation publications, First Nation issues," he said.
O'Connor said Murray would be the last person to make a racist statement like the one in the ad.
It was an oversight by one of the salespeople, he said.
"[Murray] is not at all responsible."
Murray declined an interview request. Gingras didn't immediately respond to a request for comment.
In a longer post on Facebook, Murray called the language "deeply offensive."
"I was not aware of this advertisement and did not approve of its content. However, I assume full responsibility for what has happened and I offer my most sincere apologies to all those who were offended by this comment," she wrote.