An anti-Muslim banner displayed during Collingwood's one-point win over Richmond at the MCG on Friday night has been condemned "in the strongest terms" by the AFL and the Magpies.

A sign was unveiled under one of the big screens at the ground, saying: "Go Pies! Stop the mosques." It was emblazoned with the crest of nationalist group the United Patriots Front.

A group of fans were ejected from the game for displaying the "offensive banner".

Collingwood released a statement saying it would cut ties with those responsible for the banner if any connection to the club was found.

"Regardless, these people do not speak for Collingwood and are condemned by Collingwood. If it is established that they have a formal connection to the club, this connection will be severed," the statement read.

"There is no place at Collingwood, or in our game, for such behaviour."

The United Patriots Front posted a video of the banner being unfurled at the game on its Facebook page with the words "Rise without fear", with a number of people commenting on it.

The MCG's official Twitter account said the sign had been taken down as soon as security had been notified and the owners were booted from the ground "for displaying material that was deemed to be racist and offensive to others".

The account said the banner breached the conditions of entry, but admitted it was impossible to "assess the contents of every folded up banner/sign" as fans entered the stadium.

"If displayed inside, we remove them," they said.

The league, police and MCG security are investigating.

"The AFL condemns the behaviour in the strongest terms and such actions have no place in society, and not in our game," an AFL statement read.

Former St Kilda player Ahmed Saad said he was "very disappointed" to see such an ignorant sign at an AFL game.

In response, AFL diversity manager Ali Fahour also expressed his dismay.