The picture promoting an upcoming club social called "All White Night" showed men clad in full Ku Klux Klan costumes.
"It caught me by surprise, because I haven`t been on the website for a while. I didn`t know anything about it," Torquay Tigers club secretary Michael Coleman told The Herald Sun.
"But I`m thinking `All White Night` and hoping no one would find any racism in that.
"But the picture is likely to be the work of an individual person and it`s certainly not the club`s thoughts."
The Ku Klux Klan, also known as the KKK, is a white supremacist organisation which has a record of violence towards African-Americans, Jews and other minorities.
The picture was withdrawn soon after it attracted widespread media attention, being replaced by Disney character Snow White.
But the club`s social on May 2 is still being promoted as an "All White Night" on the website homepage.