Lupfer said in a statement obtained by the Denver Post he "accepts" the two-week sanction without pay, adding, "I am deeply sorry for my behavior, which does not represent who I am or my values."
He was caught on camera mouthing the slur at Washington State quarterback Connor Halliday after the Cougars signal-caller had completed a 25-yard touchdown pass in the first quarter of the Rams' eventual comeback victory.
Halliday had to be restrained by CSU strength and conditioning coach Rashad Harris, the Post reported.
The video went viral on the Internet, prompting an earlier apology by the coach.
CSU Director of Athletics Jack Graham imposed the penalty Monday, also mandating anger management and diversity sensitivity training.
"I was angry and careless with my words, and my words hurt many people," Lupfer said. "I sincerely apologize to the GLBTQ community for causing pain by using a slur without considering its meaning. I take ownership of my words and fully understand why people are very upset."