The figure named 'Bastian' and seen wearing various German World War Two military uniforms, including the swastika and eagle, symbol of Nazi Germany is on sale through the Hong-Kong based DID company.
The resemblance to the Manchester United playmaker Schweinsteiger is striking.
A spokesman for 31-year-old, who won the World Cup with Germany in 2014, told reporters he was taking legal action while German media were enraged by what they perceived as Nazi depiction of the player.
'Pure coincidence'
The manufacturing company told German paper Bild any resemblance was "purely coincidental".
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"We thought that all Germans look like that. Bastian is also a very common name in Germany," the spokesperson added.
Scandal doll Bastian
"Filth," said Munich's tz newspaper while Stern magazine said "Scandal doll Bastian. That is what it looks like," next to a picture of the controversial product.
The DID company, which is also selling figures of former Soviet Union leader Joseph Stalin and British war leader Winston Churchill, was still advertising the figure on the front page on its website on Thursday.
Schweinsteiger is among the most successful German footballers of his generation, having won the Champions League with Bayern Munich in 2013 as well as numerous domestic league and German Cup titles.
He joined United this season.
