Groups that campaign against sexual exploitation of women have said that the range of clothing for girls reduces Xpress girls sex toys.
Kmart Chief Executive Guy Russo apologised and said he would have had the lingerie removed from all the shops immediately.
"Are inadequate and we will not sell any such products in our shops," he said.
"I apologise sincerely our actions and not this will happen again."
Melinda Tankard collective Shout spokesperson Reisttold told the Herald Sun products were part of a trend to sexualise girls from treating them as older than I am.
"We are pleased that Kmart acted so quickly, and once again this shows the power of individuals to affect behavior," he said.
Child protection campaigner Hetty Johnston told the newspaper the girls Xpress, for sale in Australia and New Zealand, was "shameful".
"I think really that retailers must understand that we don't like our children sold for sex," he said.
They were aimed at girls 16 and older.
Underwear is just the latest in a long line of children's and baby clothes that sports some see as objectionable slogans.
Two years ago, children sold cotton on baby clothes with slogans like "I am a man of tits", "the condom broke", "I'm living proof my mum is easy" and "Mummy likes it on top".
The company has refused to withdraw the clothes, saying that there was "a place in our society for provocative humor which pushes the boundaries".
In 2007, the world released children t-shirt emblazoned with "Future Porn Star", which the designer Francis Hooper defended as "humorous and irreverent."
The year before, the world had produced a range of t-shirts to Starship Foundation, a charity that supports the Starship children's Hospital.
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