The Advertising Standards Authority (ASA) said complainants had expressed concerns that the advertisement, in particular the phrase "go home", was offensive and irresponsible.
It said complainants were concerned this was "reminiscent of slogans used by racist groups to attack immigrants in the past and could incite or exacerbate racial hatred and tensions in multicultural communities".
The ASA said it has received 60 complaints from the public.
The 10,000-pound pilot project, launched by the Home Office, has been widely criticised by the Liberal Democrats and Liberty, an independent organisation working to protect civil liberties and promote human rights in the UK.
The department has said its vans worked, but did not say how many people had left the country, the BBC reported.
Responding to criticism, Downing Street pointed out that the scheme was cheaper than the 15,000-pound cost of forcibly removing illegal immigrants from the country.
They suggested the scheme could be rolled out across the country, Skynews reported.
Vans were driven around Barnet, Hounslow, Barking and Dagenham, Ealing, Brent and Redbridge as part of the campaign, which started on July 22 and lasted a week.
Labour Party's shadow immigration minister Chris Bryant said: "This is another embarrassing blow to a Government which continues to fail to deal with immigration.
"With more people absconding at the border and fewer illegal immigrants being returned, (Prime Minister) David Cameron and (Home Secretary) Theresa May can't even get the basics right, stumbling from one shambles to another.
"You've got to question the Government's competence. We need effective action on immigration not offensive stunts," Bryant said.
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