The ad, showing the woman wearing knickers and stockings while leaning against a wall and looking over her right shoulder, was considered offensive because it could be seen by children.
The ad ran on a commercial vehicle and attracted complaints from two members of the public.
Ann Summers said that although the model was not wearing any clothing on her top half, her breasts were not visible and, furthermore, ran from Monday to Friday between 10am and 5pm, when children were at school.
It added the strapline was a play on words and therefore unlikely to be interpreted by children in any other way.
The Advertising Standards Authority agreed that that the ad was unlikely to be understood by children and acknowledged that although the image and sexual innuendo might be distasteful to some, it was unlikely to cause serious or widespread offence.
The ad follows another, promoting the Rampant Rabbit vibrator, which was banned last week by Transport for London from the Tube network.
That campaign was also given the green light by the Advertising Standards Authority. However, TfL said that the content, featuring a mermaid and the line "wave after wave of pleasure" was still enough to offend passengers.
In a separate adjudication, the ASA has rapped airport operator BAA for claiming the price of all food and drink sold in BAA airports is matched by the UK high street.
A leaflet encouraged travellers to "get stuck in as you won't pay a penny more than you're used to".
A complainant pointed out that the leaflets were misleading because airport food and drink outlets, in particular WH Smith and JD Wetherspoon, charged significantly higher prices than their high-street equivalents.
The ASA found that the prices in WH Smith and JD Wetherspoon stores at some airports were benchmarked against their most expensive locations in Central London and the City of London.
The ASA said: "Because the leaflets did not make clear that some major airport food outlets matched their prices with their Central London branches, which charged more than regional branches, we concluded the claims were misleading."