The banner, in Belfast’s Tiger’s Bay area, contained allegations about the Sinn Féin North Belfast election candidate and his family.
Mr Dodds said the DUP had nothing to do with the banner.
He said the Democratic Unionist Party (DUP) had been “crystal clear” on the use of violence and the activity of those who take part in “vile internet trolling” of victims and some unionist politicians.
However, he also challenged Sinn Féin not to be selective, calling on republicans to “stop eulogising the violent perpetrators of the IRA” including the gunman who shot a police officer guarding him when he was visiting his seriously ill son in hospital in 1996.
Ulster Unionist leader Steve Aitken said the banners “need to come down, no two ways about it”.
Belfast City Council workers were flanked by police as they removed the banner on Monday.
Supt Melanie Jones said police were in attendance “to ensure the safety of persons removing a banner from council property”.
“Enquiries are under way to establish if these banners constitute any criminal offence or offences, including a hate incident or hate crime,” added Supt Jones.
‘Hatred and division’
Sinn Féin leader Mary Lou McDonald said there had been an “appalling and dangerous” campaign of “harassment, intimidation and threats against John Finucane and his family”.
He is a candidate in next month’s Westminster election in the North Belfast constituency, which is also being contested by outgoing DUP MP Mr Dodds and Nuala McAllister of the Alliance Party.
Mr Finucane’s father, Pat, was a solicitor who was shot dead by loyalists at his home in north Belfast in 1989.
The PSNI said it had also received reports about banners erected in south Belfast, adding enquiries were being made.
SDLP leader Colum Eastwood said banners targeted at candidate Claire Hanna had appeared in south Belfast.
“The banners that have been erected in Belfast targeting John Finucane and Claire Hanna seeking to sow hatred and division are disgusting,” said Mr Eastwood.
“Those responsible are cynically using, abusing and retraumatising victims for narrow political purposes.”
With many thanks to: BBC NewsNI for the original story