The painting by local artist Yuill Damaso depicts South Africa's first black president's dead body on an operating table, undergoing an autopsy as prominent South African political figures look on.
The work, which is on display in an upmarket Johannesburg shopping centre, has drawn outrage from South Africa's ruling African National Congress (ANC).
"The ANC is appalled and strongly condemns in the strongest possible terms the 'Dead Mandela' painting," the party said in a statement.
"It is in bad taste, disrespectful, and it is an insult and an affront to values of our society." The ANC called the painting "racist" and criticised the artist for depicting Mandela as dead, saying it was considered an act of witchcraft in African society.
But Damaso said he meant no disrespect to the hero of South Africa's anti-apartheid struggle. "It shows Mandela's flesh and bones, which shows that he was a man, just like every one of us," the artist told the Saturday Star.
"He achieved great things by working hard, and he has so much influence on the country and the world, but the painting shows that he is just an ordinary man."
The painting, a modern take on Rembrandt's 17th-century work The Anatomy Lesson of Dr Nicolaes Tulp, shows Mandela lying on an autopsy table as the late Nkosi Johnson, a child AIDS activist who died at 12, cuts into his flesh.
A group of South African leaders crowds around the table, including Nobel Peace Prize winner Archbishop Desmond Tutu, President Jacob Zuma, former president Thabo Mbeki and opposition leader Helen Zille.
Mandela, who turns 92 on July 18, has limited his public appearances in recent months as his health has become increasingly frail.