Google users who searched on the word "abo" have been presented with a sponsored link, with the same offensive term in the headline, to "An experience you'll never forget. Experience Aboriginal culture in NT".
The advertisement then linked to the Travel NT website.
The faux pas was uncovered by Melbourne blogger Brett Nicholson and exposed on media and marketing website Mumbrella earlier today.
The link has since been removed.
Mr Nicholson said on his blog digitalOZ he made the discovery by accident after misspelling an acronym.
"I was quite shocked," he said.
"My initial reaction is to blame it on incompetence. Sure, Aboriginal culture represents massive opportunity for Tourism NT and it's clearly a focus for them but I still think this is inexcusable."
Tourism NT said it had been alerted to the use of an inappropriate search term to promote its consumer website, and had taken immediate and appropriate action to rectify this problem.
‘‘Tourism NT alerted MPG, our online search provider, who took down the link, effective immediately,’’ it said in a statement.
‘‘[Our] search procedures have been reviewed in order to prevent such errors reoccurring.’’
A Google spokeswoman said the company did not allow ads to use offensive terms such as explicit or racist language.
‘‘We investigate complaints about violations of our policies,’’ she said.