July 2 (Reuters) - Arizona will withdraw incentives for Nike Inc’s manufacturing plant in the state after the sportswear maker pulled the release of a sneaker that featured an old version of the American flag, Governor Doug Ducey said on Tuesday.

Nike decided to recall the shoe after former NFL quarterback and Nike endorser Colin Kaepernick asked the company not to sell a shoe with a symbol that he and others consider offensive because of its connection to an era of slavery, the Wall Street Journal reported here on Monday.

Nike had planned to release a new version of the Air Max 1 sneaker ahead of the Fourth of July holiday that featured a version of the U.S. flag with 13 white stars, commonly known as the “Betsy Ross flag”.

"Words cannot express my disappointment at this terrible decision. I am embarrassed for Nike," Ducey, a Republican, said in a series of tweets here on the recall.

“Instead of celebrating American history the week of our nation’s independence, Nike has apparently decided that Betsy Ross is unworthy, and has bowed to the current onslaught of political correctness and historical revisionism,” he said.

Ducey said he had ordered the State’s Commerce Authority to withdraw all financial incentives under its discretion for the company’s plant.

Nike was planning to construct a $185 million plant in Goodyear, Arizona that would employee over 500 people. (Reporting by Aishwarya Venugopal in Bengaluru; Editing by Anil D’Silva)