Beenie Man's slot has been taken by lesbian reggae singer Diana King, the first Jamaican artist to publicly come out, reported GayNZ.
Controversy also surrounds the performance of one version of reggae legacy act UB40 which boasts a different line-up to that which headlined last year's festival.
In a statement issued this morning, organisers said they pulled Beenie Man because he had "failed to answer questions about his past lyrics and his current stance on the gay community".
"We took the concerns of the gay community very seriously and sought to address them with Beenie Man," said spokesman Danny Leaoasavaii, aka Brotha D.
"Raggamuffin is a family festival and we do not discriminate on the basis of race, gender or sexuality," he said.
"After being made fully aware of his past comments and lyrics, and continued homophobic attitude, the Raggamuffin team made the decision to remove him from the festival line-up."
Beenie Man had been asked to publicly state his support of the gay community and retract his past lyrics, but failed to do so, organisers said.
In 2012, he released a video saying he respected "each and every human being ... regardless of your sexual preference". He said: "Do not fight against me for a song I sang 20 years ago."
Other artists on the Raggamuffin bill include The Game, Macy Gray, Xzibit and Eddie Grant.
Beenie Man's scheduled 2010 appearance at the Big Day Out was pulled after similar protests, including a Facebook page demanding he not perform.
At the time, organisers said he had promised to stick to "peaceful and humanistic values" but they then pulled his performance because "the depth of feeling and hurt amongst these groups has convinced us that for us to proceed with his Big Day Out appearances was, and would continue to be, divisive among our audience members and would mar the enjoyment of the event for many."
- nzherald.co.nz
