The slur was made Thursday in Salt Lake City during a press conference at the Western Athletic Conference Football Preview. McMackin was describing a cheer used at last year's Sheraton Hawaii Bowl banquet.
McMackin has been suspended for 30 days without pay and has received a voluntary reduction in salary, the newspaper said.
"I've offended the gay and lesbian community and I want to work with the gay and lesbian community to make this a teachable moment for myself and hopefully others," McMackin said Friday at a news conference that was attended by some 50 players and staff. "I'm very pained and disappointed in myself and hope to make up for some of the pain I've caused others."
Hawaii Gov. Linda Lingle told the newspaper the remark was inappropriate and said the second-year coach realizes it.
"I've certainly said things I wish I could take back and I know the coach is feeling that way right now," Lingle said Friday. "Nobody's going be harder on him than he's going be on himself in this situation."
"It certainly does not represent the values of the University of Hawaii," said school President David McClain. "I'm glad to learn that coach has apologized. This is the first step in the healing process."