The image - branded "disgusting" by black politicians - was taken from his 1984 student yearbook page from his time training as a neurologist at Eastern Virginia Medical School.
The yearbook images were first published by the conservative news outlet Big League Politics.
The New York Times also reported that Northam had been calling his former medical school classmates to obtain more information about the photo. The page shows a picture of a person in blackface and another wearing a Ku Klux Klan hood next to different pictures of the governor.
The Democratic governor confirmed in a statement that he was in the photo wearing a costume "that is clearly racist and offensive".
I am deeply sorry.
In regard to his "Michael Jackson costume", Northam said he regrets "that I did not understand the harmful legacy of an action like that".
Several Democratic candidates who are running in the 2020 presidential election also showed strong criticism toward Northam's surfaced photo.
"I believe now and then that I am not either of the people in this photo", Northam said. This isn't just a one off incident, but part of a disturbing history that includes him going by the name "coonman" - a racial slur - in high school.
"There is no place for racism in America", Biden tweeted.
If Northam were to heed the calls of those prominent Democrats looking to pressure him into stepping down, Justin Fairfax, the 39-year old, African American lieutenant governor, would be elevated to governor.
In the video, Anderson Cooper rightly identifies the governor as a Democrat, but beneath the governor's image, CNN ran the chyron: "Ralph Northam (R) Virginia".
The revelation comes amid a wild week in which Northam, a Democrat, was criticised after he made comments defending a bill that would have lifted restrictions on late-term abortions.
Northam said if he felt he wasn't able to function efficiently as governor, he would re-visit the matter.
On Saturday, the Democratic Party of Virginia announced that they allowed Northam to "do the correct thing" and resign but received "word he will not do so this morning".
Parker Slaybaugh, a spokesperson for House Republicans, said the caucus hasn't heard from Northam or his office, though, since the photo surfaced.
"He did say that if it becomes clear he that [he] cannot become effective, that [he] can't be efficient as governor, then [he] will have to revisit that issue", Holsworth said.
The Virginia Legislative Black Caucus issued a statement late Friday saying "we feel complete betrayal" and are "still processing" the pictures.
Virginia Governor Ralph Northam now denies he is the man in blackface in a photo in his yearbook.
Others said there was no question he should step down.
But on Saturday he said he had looked at the photo more carefully and was not sure it was him.
Northam, 59, grew up on the Eastern Shore of Virginia in the fishing village of Onancock.
The pictures, which have triggered public outcry, show a man in blackface and another man in Ku Klux Klan robes. "That's not something that you build overnight", Northam told the AP during a 2017 campaign stop while describing his relationship with the black community.
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