Bosses at the Haifa Museum of Art had previously resisted calls to take down the life-size 'Mc Jesus' model, on the grounds of freedom of expression.
But the city's mayor Einat Kalisch-Rotem said it would be removed at the earliest opportunity, following discussions with church leaders.
In a tweet translated by the Reuters news agency, she said: "The sculpture will be removed and returned as soon as possible.
"We regret the aggravation the Christian community experienced... and the physical injury and violence that surrounded it."
1. בסיכום עם ראשי הכנסיות, והיות וחוזה ההשאלה של הפסל מק'ישו מסתיים בימים אלה, היצירה תוסר ותוחזר בהקדם. שאר הפריטים יהיו תלויים בחדר סגור. pic.twitter.com/Cox4sKloFQ
— עינת קליש רותם (@EINATkalisch) January 16, 2019
Violent protests erupted over of the artwork last Friday. Dozens of people had forcibly tried to enter the museum in unrest which saw one person arrest. Firebombs were thrown at the museum.
Created by Finnish artist Jani Leinonen, 'McJesus' formed part of an installation about consumerism and religion.
It prompted fierce opposition from Arab Christians in Israel - who compromise approximately two per cent of the country's population.
Miri Regev, the Israeli culture minister had joined calls for the removal of the piece.
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