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Tarran Betterridge, a Canberra university student, was told she would be a "perfect" campaigner for Generation One, but that the group was looking for "someone that looked indigenous".
"I couldn't believe a company that advocates increasing indigenous employment would question hiring a person because they do not meet the colour standard," she wrote for public broadcaster ABC's website.
"(It) left me feeling useless -- that because I have pale skin I should not be included."
Betterridge, from the Wiradjuri tribe, said she was "in shock and felt humiliated" when she was eventually turned down.
Generation One is a grassroots non-profit group founded by Fortescue Metals founder and mining magnate Andrew "Twiggy" Forrest.
It campaigns to increase education, employment and living standards for Aborigines, Australia's disadvantaged first inhabitants with a culture stretching back many thousands of years.
Chief executive Tim Gartrell said Generation One was "shocked and appalled" by the story and had terminated its contract with the recruitment firm, Epic Promotions.
"It's correct that we asked for people of indigenous heritage to work for us and with us," Gartrell told ABC radio.
"At no point did we issue directives asking for indigenous people who look indigenous, that is offensive. That is totally against what we stand for and we would not do that."
Gartrell said he had apologised unreservedly to Betterridge, who is studying to be a teacher, and said it had been both embarrassing and hurtful for her.
Aborigines, once more than a million in number, now account for just 470,000 out of a population of 22 million, and suffer disproportionately high rates of disease, imprisonment and unemployment.
Indigenous men die, on average, 11.5 years earlier than non-Aboriginal males.
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