An online petition by the activist group Change.org urging the game distributor not to launch the game has drawn more than 100,000 signatures.
The game was scheduled to launch on Steam June 6, but widespread condemnation and anger from lawmakers, activists, and the parents of school shooting victims apparently caused Valve to investigate.
In an email to Variety, a Valve spokesman said the person who made the game has a history of abusive behaviour and it's removed both developer Revived Games and publisher Acid from its digital storefront.
"This developer and publisher is, in fact, a person calling himself Ata Berdiyev, who had previously been removed last fall when he was operating as '[bc]Interactive' and 'Elusive Team,'" Valve said.
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"Ata is a troll, with a history of customer abuse, publishing copyrighted material, and user review manipulation.
"His subsequent return under new business names was a fact that came to light as we investigated the controversy around his upcoming title. We are not going to do business with people who act like this towards our customers or Valve."
Valve added that a broader conversation about Steam's content policies "is one that we'll be addressing soon."
A trailer that was previously on the website of Valve's digital distributor Steam opened with the player's character as a SWAT team member entering a school to tackle a shooter, before switching over to the perspective of the attacker, with the action set to a pounding heavy metal score.
It ended with a trail of students' bodies littering an auditorium room as a stats box keeps count of the numbers of police and civilians killed.
In addition to allowing players to pick sides, the game boasts a multiplayer mode and the ability to play as an unarmed student trying to survive.
"I have seen and heard many horrific things over the past few months since my daughter was the victim of a school shooting and is now dead in real life," said Fred Guttenberg, whose daughter, Jaime, 14, was killed in the February 14 shooting at Marjory Stoneman Douglas High School in Parkland, Florida.
"This company should face the wrath of everyone who cares about school and public safety and it should start immediately," Guttenberg said on Twitter. "Do not buy this game for your kids or any other game made by this company."
"This is inexcusable," said Florida Senator Bill Nelson. "Any company that develops a game like this in (the) wake of such a horrific tragedy should be ashamed of itself."
Ryan Petty, whose 14-year-old daughter Alaina died in Parkland, also criticised the game.
"It's disgusting that Valve Corp is trying to profit from the glamorisation of tragedies affecting our schools across the country," Petty said on Facebook. "Keeping our kids safe is a real issue affecting our communities and is in no way a 'game.'"
Parkland students launched a grassroots campaign for tighter gun control following the shooting at their school which left 14 students and three adults dead.
A disclaimer by the game developer, Revived Games, said the game "is meant solely for entertainment purposes and simulation."
"Revived Games believes violence and inappropriate actions belong in video games and not real world, and insists that in no event should anyone attempt to recreate or mimic any of the actions, events or situations occurring in the game," it says.
"If you feel like hurting someone or people around you, please seek help from local psychiatrists or dial 911 (or applicable)."
Ten people were killed in a school shooting in Texas on May 18 by a heavily armed 17-year-old classmate.
- With Variety
