An Australian shop owner who put a sign up banning "black teenagers and dogs” has taken it down after it caused widespread outrage.

The printed sign in the window of a Melbourne milk bar read: “Statement. Because the 14-18 year old black [sic] always steal. Prohibit 14-18 year-old blacks and dogs into the shop”.

A resident, known as Cam, tweeted a photo of the sign and told 3AW radio of his disbelief.

"I don't think anyone in the Melton community would fancy this," he said.

Many on social media expressed revulsion - describing the sign as “disgusting” and labelling it “hate crime” - and the wording was also condemned by police.

“Victoria Police does not support the language of the poster and deems the message as inappropriate," a spokesman told news.com.au.

Speaking to 7 News, the unnamed shop owner shared CCTV footage of eight black teenagers entering his shop, intimidating him and stealing goods.

He said the sign had been an impulsive reaction and that he had been hit by similar crimes 20 times in the last two years.

Despite the backlash, some came to his defence.

Local resident Luke Richardson told 7 News: “It’s not good but I understand why he’s done it. He’s a shop owner and it’s his livelihood.’

United Nations expert Mutuma Ruteere recently urged Australia not to water down legal prohibitions on hate speech.

The conservative government had planned to amend Section 18 C of the Racial Discrimination Act, which prohibits offending someone on the basis of race, colour or ethnicity.