Hull and Humber Chamber of Commerce said the 33ft (10m) stainless steel sculpture next to Hull's Beverley Gate relic was like a "granny's vase".
The gate was where King Charles I was refused entry to Hull in 1642, sparking the English Civil War.
Hull City Council said it has submitted plans for "an engaging piece of art".
The chamber is to request the council reconsider the plan.
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The statue, called Shadow Gate, is to be positioned between Whitefriargate and King Edward Street.
Architects Tonkin Liu said it "invokes the imagery of the trading ships masts and sails," and that "careful consideration has been made to position the sculpture to minimise any harmful impact to surrounding historical buildings."
Beverley Gate was designated a scheduled ancient monument earlier this year.
The chamber has suggested, as an alternative, a statue of Sir John Hotham - the governor of Hull who refused King Charles I entry into the city and its arsenal.
During the civil war he was found guilty of treachery and executed in London.
Plans for a sculpture near the remains of Hull's ancient defence walls have been criticised by the chamber of commerce.