The posters have been taken down from walls at South Mountain Elementary School and the assignment will be rethought next year, the superintendent said.
Some parents had complained about the auction posters, which contained such wording as "Men: aged from 20-26, strong" and "Anne, aged 12 years, a fine house girl."
Students also had created wanted posters, apparently for for runaway slaves, that depicted brown-skinned men and women with dollar rewards attached.
"While it was not our intention, we recognize that the example of a slave auction poster, although historically relevant, was culturally insensitive," said Dr. John J. Ramos, Sr., superintendent of the South Orange-Maplewood School District.
"We certainly understand and respect the strong reaction which some parents had to seeing slave auction posters included with other artwork from the assignment," he added in a statement sent to CNN. "We are rethinking the Colonial America Project for next year, and will eliminate the example of a slave auction poster."
Students at the school in South Orange were assigned to examine "the ugly and foundational role that slavery played in Colonial America," Ramos said. They were asked to select a colony to research and then complete tasks, including creating ads for slave auctions, using their research, he said.
But after the posters were hung in the school, some local residents were outraged.
One, Jamil Karriem, posted images of the posters on Facebook
last week and encouraged parents to complain to South Mountain Elementary Principal Alyna Jacobs and to the district.
"These images were on display for all students (ages ranging from 4-10) to see, including those that would lack any context of the underlying 'lesson' or 'purpose,'" Karriem said on Facebook. "It is COMPLETELY lost on me how this project could be an effective way to teach any student in any age group about American history."
But another parent, Andrea Espinoza, had a different opinion.
"It's part of history, of course," she told CNN affiliate WABC
. "It happened. I think it's good that they know."
In his statement, Ramos said the purpose of the exercise "was to examine what life was really like" back then.
"The principal and I have both apologized for any unintended offense caused, and we have removed the posters from display," he added.