A milk bar in Melbourne's west has placed a racist sign in their window banning black teenagers from the shop.

The typed sign has sparked outrage after it appeared in the window of the shop on Burleigh Road, Melton.

"Because the 14-18 year old black always steal," the sign reads, the store will now prohibit "blacks and dogs into the shop."

The sign was initially shared with radio station 3AW .

"I don't think anyone in the Melton community would fancy this," local resident Cam told the radio station.

Social media has denounced the racist sign as "disgusting" and "horrible".

"That's horrible," Amy Adams wrote.

"It's people like this putting up these sorts of comments that not only attract bad for themselves but make our world a horrible place."

"This is disgusting and illegal," Kylie Love said.

A Victoria Police spokesman said officers were aware of the sign.