Coun Mohammad Maroof, who represents Nether Edge and Sharrow, was suspended by Sheffield Labour Party in December following what he called an 'honest mistake'.
The photo was distributed to a Mums United Whats App group as its founder Sahira Irshad was presenting a petition to full council on knife crime.
Coun Maroof, who gave a full apology at the time, has said sorry once more. He said at the time that he was sent the unsolicited image and accidentally forwarded it on.
In a statement this week, he said: 'I want to again sincerely apologise for the offence and hurt caused, and I will ensure that something like this does not happen again. I have accepted the disciplinary action and remain absolutely committed to my community work and serving my constituents.'
A spokesperson for the Labour Group said: 'Our investigation into Coun Maroof has concluded and appropriate disciplinary action has been taken. Coun Maroof has accepted this and repeated his unreserved apology.'