Complaints came in when photos from the event were posted to social media with KKK-related comments.
Related: Students pose for pictures in T-shirts spelling racial slur
WCCO reported that one screenshot of a Snapchat post shows a student in the makeshift uniform with the caption, "Grand wizard."
The term refers to the leader of the Ku Klux Klan.
This isn't the first incident like this to happen. In January, students at Desert Vista High School in Arizona posed in T-shirts that spelled out "NI**ER."
Some students involved have been suspended for a few days, but it is unclear if and how other students may be punished.
"Staff and administrators did not witness nor receive any reports of behavior believed to be inappropriate during the event. Upon receiving allegations of misconduct later that night, school and district administration promptly launched an investigation," Westonka School district said in a statement.
"Westonka Schools is deeply committed to providing a safe and welcoming learning environment that respects diversity in all forms and will continue to work with families to ensure the well-being of our students, staff and visitors."
The district said there is an ongoing investigation into the other students.