According to the BBC, models in New York were asked to wear fake ears, lips and busy eyebrows in the student show.
But the props were criticised with one model refusing to wear the "clearly racist" items.
The Fashion Institute of Technology said they would investigated.
President Joyce F Brown said:, "it does not appear that the original intent of the design, the use of accessories or the creative direction of the show was to make a statement about race.
"However, it is now glaringly obvious that has been the outcome. For that, we apologise - to those who participated in the show, to students, and to anybody who has been offended by what they saw."
Jonathan Kyle Farmer, chairman of the modern fine arts fashion design course said he apologised to model Amy Lefevre, who refused to wear the items.
"He said: "I deeply apologise for any harm and pain I've caused to those involved with the show, including Amy Lefevre.
"I take full responsibility and am committed to learning from this situation and taking steps to do better."