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The Fair Work Ombudsman last week fined Calombaris, 40, and his Made Establishment company $200,000.
Mr Calombaris featured in Tourism WA's advertising campaign "Create Your Own Gourmet Escape in WA", which first aired in the eastern states during WA Week on MasterChef this month and was due to run until September.
But on Monday, Tourism WA managing director Brodie Carr said the ads with Mr Calombaris had been suspended, although the campaign with MasterChef would continue.
"We've paused all of our work with George for now and we're talking to his management about recouping some of our costs that we've paid him," Mr Carr told 6PR radio.
"We'll continue with the campaign that we're doing with MasterChef but probably not with George."
Mr Carr conceded Mr Calombaris' troubles with his restaurants "possibly" should have come up when he was considered for the tourism role.
He would not reveal how much Mr Calombaris was paid.
Premier Mark McGowan previously said working with MasterChef for tourism promotion was innovative but would not confirm the reported $1.2 million price tag.
WA Tourism Minister Paul Papalia on Monday described Mr Calombaris' actions as terrible.
"People should pay their employees what they are owed and what they deserve, and that's really disappointing," he told reporters.
A Tourism WA spokeswoman said Mr Calombaris was a small part of the campaign encouraging people to visit places featured on MasterChef.
Other recent WA tourism initiatives included bringing the Manchester United soccer team to Perth, direct flights from Japan and Chris Hemsworth's popular quokka selfie on social media.
Mr Calombaris has apologised for his actions, but that has not stopped more than 22,000 people signing a petition calling for him to be sacked from MasterChef.
"George should pay a serious price for this massive theft of workers' wages," the petition reads.
"Channel Ten should stop making excuses for this serial wage thief."
Unions have also called on the federal government to address wage theft penalties.
More than $7.83m has been back-paid to 515 current or former employees at Press Club, Gazi and Hellenic Republic, while $16,371 was back-paid to nine employees at Jimmy Grants.