Thomas, 90, told a workshop on anti-Arab bias in Dearborn, Mich., that Jewish influence made it impossible to criticize Israel in the United States.
"Congress, the White House and Hollywood, Wall Street are owned by the Zionists," Thomas said on Thursday. "They put their money where their mouth is."
The university yanked the award Friday and denounced her comments.
Wayne State "strongly condemns the anti-Semitic remarks made by Helen Thomas," the university said in an e-mailed statement, according to The Associated Press.
Wayne State's Journalism Institute for Media Diversity has given the Helen Thomas award for work that promotes diversity. The award "is no longer helping us achieve our goals," Matthew Seeger, an interim dean, told The Detroit Free Press.
This is not the first time that Thomas has made explosive comments. In June, she was caught on camera saying that Jews should "get the hell out of Palestine" and go home to "Poland, Germany and America and everywhere else."
Thomas, the daughter of Lebanese immigrants in Detroit, was once a pioneering political correspondent. She was the first female officer of the National Press Club and the first female member of the White House Correspondents Association. She has covered every president since Eisenhower and was known for her aggressive style.
Thomas quit as a columnist for Hearst newspapers following the June incident. She later apologized for the remarks.
The Anti-Defamation League blasted Thomas on Friday and said her latest comments tarnished her legacy as a journalist.
"Helen Thomas has clearly, unequivocally revealed herself as a vulgar anti-Semite," ADL National Director Abraham Foxman said in a statement. "Her suggestion that Zionists control government, finance and Hollywood is nothing less than classic, garden-variety anti-Semitism."
Robert Cohen, executive director of the Jewish Community Relations Council of Metropolitan Detroit, applauded Wayne State's decision to withdraw the award.
"I think it was just very ironic that she made these comments at an event, the purpose of which was to address stereotyping," Cohen told the AP. "And it was very disappointing to know that she received a standing ovation from that audience."
Thomas's words also drew criticism from members of her own profession. In a New Republic article titled "Helen Thomas Lets The Mask Slip," Jonathan Chait wrote that she has a problem with Jews.
Chait previously said Thomas' comments about Jews in Palestine were anti-Zionist, rather than anti-Semitic.
"I prefer to hold off on imputing motives of bigotry without strong proof, but there's not a whole lot of doubt remaining here," Chait wrote in The New Republic.
The ADL called on all institutions that have presented Thomas with awards to withdraw them. Thomas has been honored by the Society of Professional Journalists and holds more than 30 honorary degrees, according to the ADL.
"Through her words and deeds she has besmirched both herself and her profession," Foxman said. "This is a sad final chapter to an otherwise illustrious career."