Several businesses complained to Kaikoura District Council when the shark was first painted by marine conservationist and eco-artist Jono More at the lookout spot in 2009, the Kaikoura Star reported.
They felt the basking shark, a harmless filter feeder, was the wrong image for the town because it would put visitors off activities such as swimming with dolphins and seals.
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Despite the complaints, the council of the day decided to leave the shark mural unless tourist operators could show their business was being affected.
However, the operators asked for a review and despite providing no evidence of their businesses suffering, the council voted 7-1 to remove the shark.
Councillor John Diver was the only one keen for the mural to remain.
He said he was not the "art police" and the mural depicted an artist's view of the diversity of the marine life in Kaikoura.
Jono More said he was disappointed by the decision.
"That's bad news...the shark needs a lot of support.
"The basking shark is worthy of a place in Kaikoura and the fact that it is nearing extinction in New Zealand waters means it needs as much public awareness as it can get if we're to make the changes necessary to save it."
