Phillips, who was a member of Wales' 2010 Six Nations squad, has apologised for the posting on his personal Twitter account earlier this month.
Ospreys officials conducted an investigation into the matter and have confirmed the 21-year-old will face a financial penalty.
Phillips said: "I would like to apologise to anyone who may have been offended by the tweet in question.
"It was a stupid, throwaway comment that I made at the spur of the moment and no offence was intended whatsoever.
"However, with the benefit of hindsight, I realise how foolish I was to make that comment and can fully understand the offence that may have been caused.
"This incident has certainly taught me a lesson in how I conduct myself, and I have learnt the hard way to think before I tweet.
"The implications of even the smallest word can be massive, and it is easy for things to be misinterpreted. I would like to reassure people that it won't happen again."
In a statement, the Ospreys said: "As a result of the investigation, we are able to confirm that Kristian Phillips did post a tweet on November 7 via his personal account containing terminology likely to be construed as homophobic.
"Having discussed the issue at length with the individual concerned, and taking into account all the available evidence, we are satisfied that it was an innocent, if extremely naive comment to make, which was not meant in a homophobic way and no offence was actually intended.
"Further to this, upon realising that his actions had indeed caused offence, he immediately removed the tweet in question within a matter of hours of it originally being posted.
"Kristian has also shown genuine remorse and regret for his actions and for any offence caused.
"However, Ospreys Rugby does not condone the use of such language in any way.
"As a business we feel that it is necessary to ensure that all our employees realise that there is no place within the organisation for offensive behaviour or language of any kind and that they are aware of their position in society as role models.
"As such, Kristian will now face a financial penalty as per our internal disciplinary procedures, and we have reminded all employees of our social media guidelines to ensure that there is no repeat of this incident."