Accompanying a large photo of Mr Daley and his family, is his key election slogans - "schools and hospitals before stadiums" and "putting people first" - written in Mandarin.

The ads also include the head shots of 10 Labor candidates.

Mr Daley on Tuesday admitted he could have used better language and apologised if anyone was offended by the remarks made at a pub forum in the Blue Mountains in September.

"Our young children will flee and who are they being replaced with? They are being replaced by young people from typically Asia with PhDs," the then-deputy party leader was filmed saying.

In an apparent move to reassure parts of Sydney's Asian community, Labor on Wednesday took out full front-page advertisements in at least three locally-produced Chinese newspapers - the Australian Chinese Daily, Australian New Express Daily and Daily Chinese Herald.

It's understood an ad is also featured on the front page of the Sing Tao Daily Australia.

Prime Minister Scott Morrison on Wednesday denounced the state opposition leader's comments, as he announced a cut to Australia's immigration intake.

He described the remarks as "appalling", "very upsetting" and "offensive".

"I reject the comments and I think that Bill Shorten should disassociate himself as well," he told ABC News.

Mr Shorten acknowledged on Tuesday that the comment was "very poorly worded" but said Mr Daley had apologised.

Australian Associated Press