The controversial cake was prepared to mark the 75th anniversary of the National Organisation of Swedish artists, attended by culture minister Lena Adelsohn Liljeroth.
The cake was designed by an African artist known in Sweden for provocative work that aims to challenge racial stereotypes.
But cutting the cake, some said, conjured up images of female genital mutilation, a practice widely considered barbaric which is still practiced by some African communities, increasingly in secret.
Adelsohn Liljeroth attended the April 15 event and participated in the cake cutting ceremony, prompting outcry from the National Association of Afro-Swedes, which called it, "an act in bad taste and racist."
"I am sincerely sorry if anyone has misinterpreted my participation," the minister said in a statement.
"While the symbolism in the piece is despicable, it is unfortunate and highly regrettable that the presentation has been interpreted as an expression of racism by some. The artistic intent was the exact opposite."
Adelsohn Liljeroth met with the Afro-Swedish association on Monday, but the group has nevertheless called for her to resign, Sweden's TT news agency reported.
The embattled minister noted that the piece was "provocative" but said the imagery had been misunderstood.
"The actual intent of the piece...is to challenge the traditional image of racism, abuse and oppression through provocation," he statement said.