The Western trust is to remove a sign at Limavady Health centre which refers to disabled people as “physically handicapped”.
The sign was described by campaigner Peter Mitchell as “deeply offensive and wrong on so many levels”.
Mr. Mitchell said there was an onus on health care providers to use more socially acceptable language.
The Western Health and Social Care Trust has promised to take action.
Mr Mitchell, a local actor and wheelchair user, speaking to the BBC, said he initially thought the sign was a “wind-up”.
“The word handicapped is really offensive,” he said. “It comes from mid 17th Century when disabled people were seen as second class citizens, they literally had to beg on the streets with their cap in their hands.
“Do people look at me because I am in a wheelchair, as a second class citizen, that I have nothing to offer?”
He said there was ongoing debate among disability groups as to appropriate language, but said there was widespread agreement that the word handicapped was “wrong on so many levels”.
Damon Rose from BBC Ouch said the word “embodies an old fashioned idea that if you are handicapped you have something wrong with you”.
“Whereas if you are disabled people tend to think of that more as a problem people can solve by putting in ramps or accessible loos”.
In a statement the Western Trust said: “We are grateful that this has been brought to our attention and will take action to rectify immediately.”