The letters A or B were placed on various parts of the bodies of the eight models involved in the draw in Milan, where the flagship tournament for ATP players aged 21 and under begins on Tuesday.
Players were then asked to choose a model in order to discover which group they had been placed in.
One model revealed her letter by lifting up her dress to flash her thigh, while another took off a jacket to expose the letter B on her back.
Former Wimbledon champion Amelie Mauresmo took to Twitter on Monday to brand the draw spectacle a "disgrace". Judy Murray, mother to former world number one Andy, described it as "awful".
In a joint statement with sponsors Red Bull the ATP said it "deeply regretted" the ceremony.
"The ATP and Red Bull apologise for the offence caused by the draw ceremony for the Next Gen ATP Finals," the statement said. "The intention was to integrate Milan's rich heritage as one of the fashion capitals of the world.
"However, our execution of the proceedings was in poor taste and unacceptable. We deeply regret this and will ensure that there is no repeat of anything like it in the future."
The inaugural Next Gen ATP Finals was created to revitalise tennis to a new generation of fans and will showcase the young players expected to be winning the game's big prizes, once the current golden generation have hung up their rackets.
A raft of innovations, including shot clocks, electronic line calling and shortened sets, will be tested out.
Rather than offer a glimpse of the future, however, the glitzy draw ceremony has been accused of taking the sexism debate back to the 1970s.
French player Alize Cornet wrote on Twitter: "Good job @ATPWorldTour Supposed to be a futurist event right? #backtozero"
The five-day tournament, being held at the Fiera Milano convention centre, is being run in conjunction with the ATP and the Italian Tennis Federation.
(Reporting by Martyn Herman; Editing by Christian Radnedge)
