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Media said the council had told street artist known as Lushsux to remove his mural last week or face a fine, with the building owner also threatened if the image remained.
Lushsux, who previously depicted U.S. Republican presidential candidate Donald Trump in a mural, had by Monday updated the image of Clinton to show her in Islamic dress.
“If this Muslim woman offends u, u r a bigot, racist, sexist Islamophobe,” Lushsux wrote next to the Clinton mural.
On Wednesday, the wall had been painted completely black.
(Reporting by Reuters TV- Editing by Patrick Johnston)