"Of late eBay has offered items, in particular scarves, bearing the slogan 'Zick Zack Zigeunerpack'," the chairman of the council, Romani Rose, said in a statement.
The expression dates from the Nazi era and refers to Roma as "Gypsy scum."
It is one of several slurs chanted by far-right fans that often cause outrage at football matches in Germany.
"Even if this slur is partly aimed against supporters of certain football clubs it is a massive insult to Roma and Sinti."
He said the council was taking legal action against the manufacturers of the material, which was offered on sale in Germany and Austria.
About half a million Roma were killed in the Holocaust.
A spokesman for the council, Arnold Rossderf, said it wanted to make sure that "young people who are not necessarily informed about the past realize that it is wrong and insulting to use such expressions."