The video, which has appeared on social media, shows Lafferty react when a man posing for a photo with him says "up the Celts" in reference to Scottish champions Celtic. Lafferty, 35, had two spells at Celtic's rivals Rangers during a nomadic career that has taken in clubs in seven different countries.
A statement from the Irish Football Association read: "Northern Ireland senior men's team player Kyle Lafferty has been withdrawn from the squad ahead of the upcoming UEFA Nations League games against Kosovo and Greece.
"The Irish Football Association is aware of a social media video which has been circulated widely. The association also notes an investigation has been launched into the video by the striker's club, Kilmarnock FC."
In launching their investigation on Thursday, Kilmarnock said in a statement: "The club finds all forms of discriminatory behaviour completely unacceptable." Lafferty, who has 20 goals in 89 appearances for Northern Ireland, is his country's second-highest scorer of all time, but he has been in and out of Ian Baraclough's squad in recent windows and may now face a battle to return to the international ranks.