Miami Heat center Meyers Leonard was suspended from all team activities and facilities for one week on Thursday by the NBA for an anti-Semitic remark made this week while live streaming.
The league also fined Leonard $50,000 and will require him to participate in a cultural diversity program.
Leonard appeared on a Twitch livestream on Monday and made the comment after being struck down by a rival player while competing in an online game.
The 29-year-old American 7-footer (2.13m) apologized later, saying he was unaware of the meaning of the word, but the Heat had suspended him indefinitely while the NBA investigated the incident.
"Meyers Leonard's comment was inexcusable and hurtful and such an offensive term has no place in the NBA or in our society," NBA commissioner Adam Silver said in a statement.
"Yesterday, he spoke to representatives of the Anti-Defamation League to better understand the impact of his words and we accept that he is genuinely remorseful.
"We have further communicated to Meyers that derogatory comments like this will not be tolerated and that he will be expected to uphold the core values of our league –- equality, tolerance, inclusion and respect -– at all times moving forward."
Leonard, taken 11th overall by Portland in the first round of the 2012 NBA Draft, was traded to Miami in 2019 and helped the Heat reach the 2020 NBA Finals, where they lost to the Los Angeles Lakers.
Last month, the Heat announced Leonard had undergone shoulder surgery and would miss the remainder of the 2020-21 season. He played only three games in the campaign.
In nine NBA seasons, Leonard has averaged 5.6 points and 3.9 rebounds a game. He started 49 times in 51 appearances last season, averaging 6.1 points and 5.1 rebounds a contest.
At 18-18, the Heat rank sixth in the Eastern Conference this season.