The New York Times says the story, featured in a popular book published in 1999, is part of the original design for a monument to abolitionist Frederick Douglass in New York City's Central Park.
A huge quilt made of granite squares is planned for beneath an 8-foot-tall sculpture of Douglass on Frederick Douglass Circle. Two plaques would explain the story.
The newspaper said the city is reconsidering the inclusion of the plaques, so as not to "publicize spurious history."
The quilt theory was first published in the 1999 book "Hidden in Plain View," by Jacqueline Tobin and Raymond Dobard. It was based on the recollections of South Carolina quiltmaker Ozella McDaniel Williams.
The book said that slaves created quilts with codes to advise those fleeing captivity.
It's "a myth, bordering on a hoax," Yale University historian David Blight told the newspaper. "To permanently associate Douglass's life with this story instead of great, real stories is unfortunate at best."