The term was used as an anti-Black insult in the 20th century, but as recently as 2018 a woman was jailed in the country for abusing a black policeman with the word.
The supermarket’s Cooks’ Ingredients Kaffir Lime Leaves will be re-labelled as Makrut Lime Leaves "in response to customer comments we’ve received," a spokeswoman said.
The new packaging of the dried lime leaves, which are a popular ingredient in South East Asian cuisine, will be rolled out to all shops and Waitrose.com by early 2022.
Waitrose grocery trading manager Helena Dennis said: "This name change is a crucial step in recognising how important it is for us to listen to customers and educate ourselves when it comes to the language we use.
"While some of our customers may be unaware of the connotations of this particular word, it’s important to us that we avoid offending anyone who shops with us.
"It is changes like this that ensure we are moving forward. We need industry-wide support on this, and encourage other retailers to do the same in order to make a difference on a widespread, national scale."
Waitrose said it would explain the name change in shelf labelling, on recipe cards and in its cookery schools as cookbooks and other literature still widely referred to Kaffir lime leaves.
What is the history of the word and where did it come from?
The fruit, known botanically as Citrus hystrix, is native to Sri Lanka and is also found in Mauritius and South East Asia, including Thailand, where it is known as Makrut.
It is thought that Scottish botanist HF MacMillan introduced the fruit to the English-speaking world, using the name Kaffir lime in the late 1800s.
During apartheid in South Africa, the word came to be used as a racial slur and an insult against Black people.
Many chefs and food writers in Britain, Australia and the US have chosen to adopt the name Makrut for the fruit instead.