The Chinese tourist, known as Shen Shishi or Shi Shi, had painted a panda onto an existing mural on a wall at the jetty.
The panda has surprisingly become an additional attraction at the usually busy tourist hub, with more people flocking there.
The panda mural triggered online criticism from those who thought the artists had vandalised the original artwork.
The house owner later clarified that she had welcomed the addition and hoped to keep the piece, prompting the council to take action.
In a notice issued on November 13 by the Penang Island City Council’s (MBPP) Heritage Conservation Department, the building owner was ordered to erase and repaint the wall at Chew Jetty, which is recognised as part of George Town’s Unesco World Heritage site.