A 'politically incorrect' party has sparked outrage after students dressed up in Ku Klux Klan costumes and blackface.

The six university students were attending an event at the Black Swan hotel in Wagga Wagga, about 150km west of Canberra, on Thursday night.

A photo from the party shows five students dressed in white KKK robes and hoods, while a sixth man is painted in blackface and holding a bowl of cotton.

A 'politically incorrect' party has sparked outrage after students dressed up in Ku Klux Klan costumes and blackface (pictured)

'Very very politically incorrect,' one of the students wrote in the caption of the photo posted on social media.

'Cotton prices are unreal though so it's a great time to be pickin'.'

The students were all holding schooners or bottles of beer, and appeared to be posing on the premises of the popular North Wagga Wagga Pub.

They were attending an event starting at 7.30pm billed as a 'politically incorrect themed session'.

A photo from the party shows five students dressed in white KKK robes and hoods, while a sixth man is painted in blackface and holding a bowl of cotton (pictured is the event description)

'Grab a kit that would legally get you in s*** and hook right in,' the invitation to the event read.

The students were slammed as racist after the photo was shared, with angry social media users sharing the students' personal information.

The student who posted the photo had his date of birth, address, driver's licence number, workplace, rugby club and university posted on Twitter.

'[He]thinks it's ok to be a racist prick... Feel free to contact his Employer, Uni and Club,' wrote the person who shared the information.

'Disgusting - how can anyone think this is okay?' asked another person.

The Black Swan Hotel responded to accusations they turned a blind eye to the event in Facebook post late on Thursday night

'Wow. Horrific,' wrote someone else.

The Black Swan Hotel responded to accusations they turned a blind eye to the event in Facebook post late on Thursday night.

'The pub was made aware of a incident unbeknownst to staff,' the post read.

'We were unaware of this behaviour happening out the back of the pub, however we have immediately dealt with this.

'We have zero tolerance and do not condone this sort of behaviour.'

'They were not all in costumes but normal clothes. The function was private and patrons could come and go from the rear without going through the bar,' one patron wrote

Some questioned the pub's claims, pointing out that the students appeared to have been served alcohol, while others defended the establishment.

'They were not all in costumes but normal clothes. The function was private and patrons could come and go from the rear without going through the bar,' they wrote.

'So, clearly they came through and staff (two only) at the bar working were not aware of their presence.

'Staff were informed by normal patrons when they were noticed. They were then immediately dealt with and asked to leave.'

Daily Mail Australia has contacted the Black Swan Hotel for comment.