Nike's campaign also includes ads featuring Serena Williams, Odell Beckham Jr. and Seattle Seahawks rookie linebacker Shaquem Griffin, who plays professional football despite missing one hand due to complications from amniotic band syndrome as a child.
Nike, however, described Kaepernick's protests as "inspirational".
It was a loss for the NFL, which has claimed there was no collusion to keep Kaepernick out of the league, although dozens of less-qualified quarterbacks have signed with teams since Kaepernick took a knee during the national anthem to bring attention to social issues.
Nike's shares have dropped 2 percent after the company's decision to use Colin Kaepernick as the face of a new ad campaign, though the step has proved idiocy still knows no bounds as protesters "boycott" and sabotage merchandise. An arbiter last week denied the NFL's request to throw out the grievance, allowing the case to proceed to a trial. The NFL released a statement saying players were "encouraged to" but not required to stand during the national anthem as anger grew among members of the public. Just to be clear, this was NOT a protest against the National Anthem or the USA flag, but against racial injustice.
The source says Nike will feature Kaepernick on several platforms, including billboards, television commercials and online ads.
The NFL this season has adopted a rule requiring all players to stand during the anthem, although it gave them the option of staying off the field until the ceremony was over.
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The 26-year-old was then eliminated from the show, clearly heartbroken by not being able to continue things with Becca. The pair reconnected on the newest season of Bachelor in Paradise but broke up on Monday evening's episode.
Nike and Kaep have partnered since 2011, but this is the fist time the company has embraced the activist movement.
Nike has built itself around its star athletes, many of whom are African- American.
What's more, he said, the move sends a strong signal to their current roster of athletes and positions Nike as a savvy risk-taker.
Nike had retained Colin Kaepernick, even after he was not signed to a team in the National Football League, from a deal dating back to 2011, according to The New York Times.
Nike is a corporate sponsor with the NFL. The rule was subsequently suspended after it drew the ire of players, who continue to negotiate with the owners of a league suffering falling viewership and that plays under increased scrutiny of head injuries.
Nike's renewed partnership with Kaepernick might create some tension between the company and the NFL.