The newspaper ad in the Metro, for London Bridge Plastic Surgery Ltd, stated "labia reshaping" while further text underneath stated "achieve a more natural appearance" and "relieve the discomfort caused by enlarged Labia."
Five people complained to the Advertising Standards Authority (ASA) that references to "a more natural appearance" and "enlarged labia" were socially irresponsible by encouraging women to be dissatisfied with their bodies and to undertake unnecessary cosmetic surgery.
Wimpole Street-based London Bridge Plastic Surgery Ltd said the ad was for labiaplasty, also known as labia reduction, labia reshaping or female genital plastic surgery.
But the watchdog banned the ad ruling it was irresponsible because it was likely to increase dissatisfaction with their bodies.
The firm said labiaplasty was a specialist plastic surgery procedure to reduce the size of and reshape the labia.
It said an abnormally enlarged labia could be a source of physical discomfort and psychological distress for women and could be caused by pregnancy and childbirth or even some sports or hormonal effects.
The surgery claimed that 100 per cent of women undergoing labiaplasty were concerned about the aesthetic appearance and were looking for a more 'natural' appearance, while 91 per cent reported discomfort from clothing, 69 per cent reported discomfort when doing sports and a significant number reported discomfort during sex.
The firm said it did not believe it was socially irresponsible to advertise the availability of such surgery.
Rather than encouraging women to be dissatisfied with their bodies they were informing them so they could choose to do something about the condition.
But the ASA upheld the complaints and found the ad to be in breach of rules regarding "social responsibility."
It banned the ad and ordered the Surgery to ensure it didn't encourage women to be dissatisfied with their bodies.
An ASA spokesman said: "We considered that it was irresponsible to imply that any part of a person's body was not natural in appearance, including because it could encourage them to be dissatisfied with their body, regardless of whether or not it encouraged them to undertake cosmetic surgery.
"We considered that the claim risked encouraging women to view their labia as abnormal, particularly in combination with the reference to 'a more natural appearance.' We therefore concluded that the ad was irresponsible."
He added: "The ad must not appear again in its current form.
"We told London Bridge Plastic Surgery Ltd not to repeat the claims.
"We told them to take care when advertising labiaplasty to ensure that they did not encourage women to be dissatisfied with their bodies."