Footage of the training sessions shows the animals being dragged around a New South Wales farm by top players from the King's School in April.
Animal rights activists and some farmers have condemned the activity.
King's School, famed for producing national rugby stars, initially defended the training exercise.
Headmaster Tim Hawkes had said the task was "not dissimilar to that undertaken by shearers" and that no animals were harmed.
"The two rugby coaches were assured by the farmer beforehand that the activity was safe and all the more so because he would be supervising it carefully," Dr Hawkes said in a statement issued to the Australian Broadcasting Corp, which uncovered the video.
But in a later statement, he said he was "appalled at the decision".
"Regardless of whether it was supervised, or that no animals or boys were harmed, it was totally inappropriate."
The footage was reportedly posted to a private Facebook page by a teacher, but had since been removed.
The head of the RSPCA in New South Wales, Steve Coleman, called the training exercise "horrific".
"What I just saw was behaviour that can lead to similar behaviours towards humans. There's a lot to be said about violence in general," Mr Coleman told ABC.
An elite Sydney boys' school is being investigated for animal cruelty after a video emerged of students crash tackling sheep during rugby drills.