Several sites ceased selling the outfit while others continued to market it as a "World War Two evacuee girl", the BBC reported on Tuesday.
The costume -- a green beret, blue dress and brown satchel -- was criticised on social media for being "insensitive".
Anne Frank's famous diary tells of her life as a German Jew in hiding in Nazi-occupied Amsterdam in World War II.
Its account of the two years her family spent living in a secret annexe of her father's business premises made her a household name and she became a symbol of courage, optimism and determination.
The Franks were eventually betrayed, arrested and transported to the Auschwitz camp in occupied Poland. Otto Frank, Anne's father, was the only family member to survive the war.
People took to Twitter to express their anger. Images shared on social media showed the costume was initially advertised on sites such as HalloweenCostumes.com -- which uses the Twitter handle @funcostumes -- as a "WW2 Anne Frank Girls Costume".
"Now your child can play the role of a World War Two hero," the original description read. "It comes with a blue button-up dress, reminiscent of the kind of clothing that might be worn by a young girl" at the time, it added.
Carlos Galindo-Elvira, Arizona regional director of the Anti-Defamation League, tweeted that there were better ways to commemorate Anne Frank.
"We should not trivialise her memory as a costume," he wrote.
Halloweencostumes.com later removed the outfit and a spokesman for the retailer apologised for "any offence it may have caused".
The product also disappeared from the Walmart website. However, the costume was still available on sites such as Amazon where it was described by the seller as "perfect for carnivals, theme parties and Halloween".
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
About VDC
Doraiah Chowdary Vundavally is a Software engineer at VTech . He is the news editor of SocialNews.XYZ and Freelance writer-contributes Telugu and English Columns on Films, Politics, and Gossips. He is the primary contributor for South Cinema Section of SocialNews.XYZ. His mission is to help to develop SocialNews.XYZ into a News website that has no bias or judgement towards any.