Several pictures posted online showed Escobar with the message written on his eye-black stickers, which are often worn under the eyes to reduce the sun's glare.
The team announced the suspension after Escobar and team officials met with representatives from Major League Baseball and the Major League Players Association. Escobar, flanked by general manager Alex Anthopoulos and manager John Farrell at an afternoon news conference, apologized for his actions.
"Honestly it's been a terrible experience in my life and career," Escobar said through a translator. "It's something I'm sorry for and something I won't do again."
Escobar had written under his eyes "TU ERE MARICON," which can be translated as "You are a faggot."
"It was just a joke," Escobar said through the interpreter. "It was my idea but it wasn't directed at anyone in particular."
Escobar said he has friends who are gay and was embarrassed by his actions.
"It's something that's been said amongst Latinos, it's not something that's meant to be offensive," Escobar said through the translator. "For us, it didn't have the significance to the way it's being interpreted right now."
Escobar said the word is ''used often within teams" and ''has no meaning."
His forfeited salary — about $82,000 — will go to You Can Play and the Gay & Lesbian Alliance Against Defamation.
Escobar will also participate in a sensitivity training program in accordance with the team and MLB.
"What came out through all of this is the lack of education," said Anthopoulos. "It's not just an issue in sports it's an issue in life ... It's clear the problem isn't going away and this is just an example of it."
Baseball commissioner Bud Selig applauded the Blue Jays for "handling this situation appropriately and promptly" in a statement.
"I consistently say that baseball is a social institution with important social responsibilities and that I expect those who represent Major League Baseball to act with the kind of respect and sensitivity that the game’s diverse fan base deserves," Selig said.
"Mr. Escobar has admitted that his actions were a mistake and I am hopeful he can use this unfortunate situation as an opportunity to educate himself and others that intolerance has no place in our game or society."
Farrell said Escobar often writes messages on his eye-black stickers, so others in the clubhouse didn't really notice it.
"Because it's frequently done on his part, really no one paid attention to it," Farrell said. "The size of the lettering is so small that if you were to view it you'd have to be basically looking in his eyes."
Major League Baseball regulations prohibit derogatory words and symbols on uniforms. Writing something of that nature on eye-black would fall under that category, MLB spokesman Pat Courtney said.
The stickers were worn during Saturday's home game against the Boston Red Sox.
The 29-year-old Cuban shortstop made his big-league debut with Atlanta in 2007 and was traded to the Blue Jays in 2010. Escobar is batting .259 this season with nine home runs and 49 RBIs.
The suspension was set to begin Tuesday when the Blue Jays were set to start a three-game series against the Yankees, but the opener was postponed due to rain.
You Can Play, an organization dedicated to eliminating homophobia in sports, was founded by Patrick Burke, the son of Toronto Maple Leafs general manager Brian Burke.
Patrick Burke said via Twitter he was satisfied with how the Jays handled the situation.
"(The Jays) combined discipline with education to ensure everyone learns from this," he tweeted.