Officially known as "Dirty Corner," the giant steel funnel that artist Anish Kapoor himself has described as "very sexual" was covered in anti-Semitic graffiti in white paint, said Versailles president Catherine Pegard.
Phrases such as "Queen sacrificed, twice insulted" and "the second rape of the nation by deviant Jewish activism" covered the sculpture by the British-Indian artist.
"This act of intolerable violence against the work of an international artists shocks and saddens me," Pegard told journalists after inspecting the damage.
President François Hollande also released a statement on Sunday "strongly denouncing" the act of vandalism.
The 60-metre (200-foot) long, 10-metre (33-foot) high steel-and-rock abstract sculpture is set up in the garden aimed directly at the royal chateau, which attracts five million tourists a year.
When it was first unveiled in June the piece was sprayed with yellow paint.
The sculpture is one of several by Kapoor on exhibition in the gardens and inside one room of the palace until November.
Kapoor has described the piece as "the vagina of a queen who is taking power."
Kapoor's exhibition is one of the most controversial at Versailles since the authorities in 2008 opened the palace and its grounds to contemporary artists.
In 2008, Versailles hosted works by American artist Jeff Koons, and in 2010 by Japanese artist Takashi Murakami.
"The very controlled landscape of Versailles is drawn into instability. The grounds become uncertain and moving. Waters swirl. The mirrors that are so central to Versailles now distort it," reads the description of Kapoor's display.
"This world is perhaps about to tip over."
Kapoor who has said he wants sculpture to be not about form but about belief, passion or experience, has become known for his massive public figures.
His work is not the first to raise anger in France.
In October 2014, vandals in Paris's Place Vendôme deflated a massive sculpture by American artist Paul McCarthy that was shaped like a sex toy.
McCarthy then decided to take down the work, which had both outraged and amused Parisians.