Webstock said Sagmeister's joke was "wholly unacceptable" and violated the conference's Code of Conduct.
The conference organisers apologised to the interpreter saying, "We are so sorry that this happened. It should not happen at Webstock and it should not happen anywhere, in any situation."
Sagmeister tweeted an apology yesterday.
Sign language interpreter Jenn Gilbert said she accepted his apology and that his speaker's fee would be donated to Sign Language Interpreters Association of New Zealand.
The organisers of the conference said following the offensive joke there was "completely valid sense of anger and disgust in response to this incident" from the public and criticism of how Webstock handled the situation.
"We did not ask Stefan to stop speaking. We will debate whether that decision was the correct one for a long time to come," the organisers said.