Papachristou was due to compete in the London 2012 Games, which officially start this Friday.
The Hellenic Olympic Committee said Wednesday that Papachristou had been excluded from the team "for statements contrary to the values and ideas of the Olympic movement."
"It's the same as violating fair play," Isidoros Kouvelos, the head of Greece's Olympic mission, told the country's leading TV channel. "We are not here just to get medals, but to promote the Olympic ideals, to show our character."
He added that the Hellenic Olympic Committee did not contact Papachristou either before or after issuing the statement excluding her from the games.
Papachristou is in Athens and had been set to travel to London shortly before the track events start.
She has apologized for the "unfortunate and tasteless joke" and said she had not intended to offend anyone.
The athlete's remarks had prompted calls from the public and within the Greek government for her to be thrown out of the team.
Kouvelos also said the 23-year-old had "showed no respect for the basic Olympian value".
Papachristou said her dream was connected to the Olympic Games and argued that she respected the Olympic values and apologized to friends and athletes whom she may have insulted.