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Simon McLean (21) was performing outside the Scottish Shop in George St yesterday with a busking permit and the store's permission when a noise control officer told him to move along.
If he played again anywhere in the city within 72 hours and someone complained, he could have his $2500 bagpipes confiscated, he was told.
Mr McLean said he had been playing for the past four days at lunchtime for only half an hour, intentionally short so "I don't annoy people too much".
The incident has left the 2006 Australasian Young Piper of the Year runner-up and former Champions of Otago Pipe Band member upset.
"I could understand if I was playing for hours on end each day - it would start to annoy people. But half an hour a day? Come on . . .
"Scottish settlers founded Dunedin and made it what Dunedin is today. Where's the respect for our heritage?
"People come from all around the world to hear bagpipes played in Dunedin. It's a shame one person can ruin it for everyone else."
The Scottish Shop manager Kaye Foster said she was stunned and annoyed that Mr McLean had been banished "Small crowds gather to listen to him - especially tourists. They video and photograph him."
Dunedin City Council environmental health team leader Ros MacGill said she had received several complaints from surrounding businesses about the volume of Mr McLean's bagpipe playing.
She said he performed at several locations along George St and there had been complaints from businesses at each of them.
"If we don't get complaints, we don't respond. But if there is a complaint, we have to respond. We have to consider people in the area," she said.