The publisher said on Wednesday it would not proceed with publishing Bila, A River Cycle by Indigenous author Jazz Money and was looking at recycling options for already printed copies.
The university said the decision followed comments Mr Chun, the illustrator of the book, made in an online article that did not align with the university's policies and values in light of its definition of anti-Semitism.
In January Mr Chun published a Substack post entitled "We don't mourn fascists" about the Bondi massacre, criticising "liberal capitulation" to "Zionist framing" of the attack that killed 15 Jewish community members.
The framing was that "violence that impacts the affluent beneficiaries and perpetrators of imperialism is deserving of special attention, elaborate memorials, rolling media coverage, and international headlines," the post read.
NSW Police on Thursday confirmed to AAP that Mr Chun's post remained under investigation and the Engagement and Hate Crime Unit was involved.
Several authors, including Stella Prize winner Evelyn Araluen, have said they would terminate their contracts or refuse to work with Queensland University Press following the decision not to publish the children's book.
Ms Araluen said in a social media post her cutting ties followed "the shameful and abhorrent decision to pulp the work of a fellow Aboriginal storyteller without due process, communication, respect or consideration".
She said it was devastating that despite the cultural, emotional and intellectual labour given to the publisher through its First Nations storytellers, "our work can be erased on a political whim".
"Make no mistake - this is cultural violence and UQP should be deeply ashamed."
The Queensland Jewish Board of Deputies welcomed the book's cancellation, saying the university had taken a stand against "hate, vitriol and grotesque propaganda".
In a statement to AAP the university said it remained firmly committed to its press arm and valued the role it played in supporting and publishing diverse voices and stories.
"The university has determined that the statements made by Matt Chun do not align with the university's policies and values including in light of its adopted definition of anti-Semitism," the university said.
"We do not condone his views and cannot proceed in a way that suggests endorsement or association. As a result, this publication of the book will not proceed."
It said it regretted the impact on the author, Jazz Money, and would welcome the opportunity to work with her again.Â
