Everton have banned the Sun "from all areas of its operation" after the newspaper published "appalling and indefensible" allegations about Ross Barkley and the people of Liverpool.
The article, written by columnist Kelvin MacKenzie, appeared on Friday.
MacKenzie was suspended after comparing the midfielder, whose grandfather was born in Nigeria, to a "gorilla".
He also wrote that men with similar "pay packets" to Barkley in Liverpool were "drug dealers".
Everton said in a statement: "The newspaper has to know that any attack on this City, either against a much respected community or individual, is not acceptable."
Merseyside Police are investigating whether MacKenzie's comments constitute a "racial hate crime".
The Sun apologised "for the offence caused" and added that it was "unaware of Barkley's heritage".
In a statement of his own, MacKenzie reiterated the latter sentiment, adding that it was "beyond parody" to describe the column as "racist".
In February, Liverpool banned Sun journalists from its grounds over the newspaper's coverage of the Hillsborough disaster.
Saturday, 15 April, marks the 28th anniversary of the disaster.
Former Everton midfielder Leon Osman told the BBC's Football Focus: "[The ban] is justified. Liverpool in general has had a long-term problem with the Sun, and this column just antagonises the situation further."
'The people's club have listened to the people'
Liverpool Mayor Joe Anderson had led calls for Everton to ban the newspaper and he spoke with Toffees chairman Bill Kenwright on Saturday.
"Today of all days it's good news, " Anderson told BBC Sport. "We at Everton have always been proud of the fact that we have supported Liverpool FC and their fans through this.
"Everton prides itself on being called the people's club, they have listened to the people and I am delighted with how they have reacted. All credit to Bill Kenwright, he spoke to me this morning and understood that people had strong feelings on it."
Anderson had called for fans to protest at the Premier League game at Goodison Park against Burnley.
But he later said that was not necessary, adding: "Everton have responded in a positive way. We will today remember and pray for those who lost their lives in the Hillsborough disaster."
Barkley started for Everton in the game, which was preceded by a minute's applause for the victims of the Hillsborough disaster.
Everton won 3-1 and Barkley was involved in the second goal with a shot that was deflected in via Michael Keane and Ben Mee.
Former Liverpool striker Stan Collymore tweeted: "As we always knew. The People's Club. Nil Satis, Nisi Optimum. Thank you Everton, thank you."
What did the article say?
In the article, which has since been taken off the newspaper's website, former editor MacKenzie said:
- Barkley is "one of our dimmest footballers", also calling him "thick".
- His eyes make him "certain not only are the lights not on, there is definitely nobody at home", adding: "I get a similar feeling when seeing a gorilla at the zoo."
- Men with similar "pay packets" in Liverpool are "drug dealers" and in prison.
Alongside the article, The Sun published adjoining pictures of Barkley and a gorilla on their website with the caption "Could Everton's Ross Barkley represent the missing link between man and beast?" The picture was later removed.
Barkley, 23, was punched in a Liverpool bar last weekend in what his lawyer described as an "unprovoked attack".
Police confirmed they were investigating the "full circumstances".
BBC Sport has contacted the Sun and Barkley's representatives for comment.
Amol Rajan, BBC News media editor
Kelvin MacKenzie is a pretty big figure - he's been associated with the Sun for 36 years. From my days as a newspaper editor, I know that for a sub-editor or editor to stand up to a columnist can take guts.
I've asked News UK whether or not the editor of the Sun, Tony Gallagher, was in on Thursday night when this went to press - and I'm hoping I'll get an answer. But it's true to say that there has to be editorial responsibility beyond the columnist himself.
We've got two investigations going now: Merseyside Police are dealing with Mayor of Liverpool Joe Anderson's complaint on racial grounds and he has also complained to the press regulator Ipso - who are going to be very keen to show that they are in touch with public opinion.
You want columnists to be controversial, outspoken, provocateurs. But the Sun is going to have to make the call: Is it worth having Kelvin MacKenzie, or is he singlehandedly destroying the paper's relationship with Merseyside and Liverpool at a time when it is very keen to repair relations?