In the commercial, Jenner is seen walking away from a photo shoot to join a protest, where she bonds with a police officer by handing him a Pepsi.
People on social media pushed back, saying that the advertisement was tone-deaf and that it appropriated the Black Lives Matter movement for commercial gain.
On Tuesday, Pepsi released a statement saying the advertisement clearly "missed the mark."
"Pepsi was trying to project a global message of unity, peace and understanding," the company said. "Clearly we missed the mark, and we apologize. We did not intend to make light of any serious issue. We are removing the content and halting any further rollout. We also apologize for putting Kendall Jenner in this position."
Jenner's publicist did not immediately respond to a request for comment.
People began rejecting the advertisement Monday, with some saying it trivialized protests.
A key moment in the ad shows Jenner handing a Pepsi to a police officer at the protest.
People on social media compared the moment to the photo of Black Lives Matter protester Ieshia Evans being arrested.
Pepsi defended the ad as recently as last night, saying it "reflects people from different walks of life coming together in a spirit of harmony and we think that's an important message to convey."
The advertisement is no longer available on Pepsi's YouTube channel.