Garrick Tremain's cartoon making light of the measles epidemic was labelled racist and insensitive and the paper is to cease publishing his work until a review of his future with the publication is completed.
About 40 people gathered outside the Otago Daily Times office yesterday to protest at the the cartoon and Mr Tremain's ongoing employment by the newspaper.
The newspaper on Tuesday apologised for the insensitive content and timing of the cartoon and in today's front page editorial said the paper had got it wrong.
Editor Barry Stewart said the cartoon was "clearly significantly more than crass and insensitive. It was deeply offensive and it continues to cause significant distress.
"We are sincerely grateful to the many thousands of people who emailed, telephoned and messaged us to tell us the cartoon had no place in their newspaper, their news feeds and, indeed, in modern society.
"Grandparents, uncles, sisters called to ask how we could lampoon a measles epidemic that has caused such death and sorrow."
The newspaper has changed the way its cartoon is selected from being the preserve of the editor to being considered and debated by the broader editorial team, he said.
Mr Tremain has defended the cartoon, saying it was not causing any more deaths or making light of the tragedy, but apologised to those offended, and said it was a lack of judgement on his part to put it forward.
Sina Brown-Davis, one of the protest organisers, said yesterday the cartoon was racist, made a mockery of the dead and hurt a lot of people who were already in trauma. Lisa Taouma from Pacific media organisation Coconet TV said their audience was appalled by the racism.