In the statement Friday, the Democratic governor noted that the image, from the 1984 East Virginia Medical School yearbook, was "clearly racist and offensive."
"I am deeply sorry for the decision I made to appear as I did in this photo and for the hurt that decision caused then and now," Northam said.
In a later video posted to Twitter, Northam said he would continue in his role as governor, adding he was "ready to do the hard work of regaining your trust." The photo was first published by Big League Politics, a conservative website, and then picked up by local paper the Virginian-Pilot.
CBS News has since also uncovered another yearbook page from Northam's time at the Virginia Military Institute in which his nicknames are listed, one of which includes a racial slur. Northam has not commented on the nickname.
On Saturday, however, Northam told Virginia State Sen. Louise Lucas that he is not pictured in the yearbook image, contradicting his original statement, according to NBC News.
Northam was elected in 2017, in a hard-fought race that marked a significant victory for Democrats in the wake of President Trump's election.
However, he now faces calls to resign from top Democratic 2020 contenders, including Sens. Elizabeth Warren and Cory Booker, as well as within his own state.
Former Gov. Terry McAuliffe, who preceded Northam, tweeted Friday, "It's Ralph to step down, and for the Commonwealth to move forward."
Northam plans to speak Saturday afternoon at a press conference, in which he will reiterate that he has no plans to resign, despite the growing calls, NBC News reported.