The singer was found unresponsive at her home in south London last year. She was 56.
Her wax recreation was artist PJ Heraty’s last sculpture for the museum in the Irish capital before his retirement.
He has created wax figures depicting the likes of Gerry Adams, the former Sinn Fein leader, and Bono, the U2 frontman.
Mr Heraty also said he could “do better”.
A spokesman for the museum said: “In response to the public’s feedback regarding the wax figure, we acknowledge that the current representation did not meet our high standards or the expectations of Sinead’s devoted fans.
“We have listened closely to the reactions and agree that the figure does not fully capture Sinead’s unique presence and essence as we intended.”