"This image does not violate our policy and we apologize for the error," the social networking site confirmed on Tuesday evening, adding that it had to evaluate millions of reports every week.
The God of the Sea is one of the most well known symbols of Bologna, a city in northern Italy, where the statue stands in the central Piazza del Nettuno.
Writer Elisa Barbari had used the picture to illustrate her Facebook page, 'Stories, curiosities and views from Bologna'.
However, the image of the nude god with trident in hand was swiftly removed, allegedly due to "explicitly sexual content" and showing the body "to an excessive degree".
"How can a work of art be the subject of censorship?" asked Barbari.
“Back in the 1950s, during celebrations for schoolchildren graduating, they used to cover up Neptune. Maybe Facebook would prefer the statue to be dressed again,” she said.
In fact, the statue's genitalia has caused controversy in Bologna since it was first erected in the 1500s.
Local legend states that the artist who built Neptune had a row with Catholic leaders about the permitted size of the statue's appendage.
While he eventually agreed to keep it within the stated guidelines, he may have had the last laugh: from certain angles, Neptune's protruding thumb gives the illusion of an erect penis.
In November, Facebook angered Italians for banning a photo of a nude painting by artist Caravaggio, and temporarily blocking the account of the art historian who had shared the image.
And two months earlier, the site reversed its decision to censor an iconic photograph from the Vietnam War, which shows a young naked girl running from a Napalm bombing.
A Norwegian author and journalist had complained of censorship after his post containing the photo was deleted, prompting a national outcry as leading newspaper editors and even Norway's Prime Minister called on Facebook to rethink the decision.