The "Fancy" hitmaker posted an Instagram selfie on New Year's Eve, December 31, 2018, showing herself wearing the black top, with only the red lettering of the band's name visible above part of an image of a nun.
Rock fans recognised the merchandise as a notorious Cradle of Filth T-shirt, which features a nun touching herself on the front, and the words, "Jesus Is A C**t" on the back.
A number of critics hit out at Iggy for her choice of wardrobe, suggesting she's just trying to be edgy, with one questioning whether she actually knows who the British rock band is.
"Do you even listen to cradle of filth lol (laugh out loud) or just wear the shirt," asked one follower.
After spotting a headline about the controversy on social media, Iggy took to Twitter to brush off the backlash.
"Omg (oh my god) I'm too controversial for the metal community too kekekekekehahahahaha (sic)," she wrote. "It was a Christmas gift! Happy birthday you c**t!"
"(My) only regret is not posting it on Christmas," she added.
When one Twitter user wrote that the Australian star finished her 2018 with controversy and began her 2019 with one, she replied, "Technically I wore the shirt on dec 31 so my 2019 is pure."
Technically I wore the shirt on dec 31 so my 2019 is pure https://t.co/Dx2qhYL3G8— IGGY AZALEA (@IGGYAZALEA) January 2, 2019
The 28-year-old confessed to her Instagram followers in December that she had been "worn down" by trolls after she was criticised for carrying on performing after her backing dancer passed out during a show in Brazil.
"Sometimes I really feel exhausted by the world, it feels like ANY thing I do becomes an opportunity for people to tell me why I'm s**t, why my music sucks, my clothes are ugly, why I don't matter or Why im a horrible person (sic)," she wrote.
"Im worn down... the last 4 years are just me existing in a world where I can do nothing right & it's hard not to feel like 'what's the point' & keep motivated."