The message left some students confused and others worried about "racial stereotyping".
The London School of Economics, where some 25% of undergraduates are of east Asian origin, says the email was a due to "technical problem".
"The email was sent to all students and did not target students from any particular background."
The email confirms that Kung Fu Panda "has accepted an unconditional offer of admission" to the LSE.
The university says it was sent out to about 200 students before the mistake, due to a mail-merge error, was spotted.
"I thought it was some kind of racist joke at first, but it turned out to be some sort of test," Christy Pang, a history student, told the Tab student newspaper.
Another asked the LSE's freshers' website: "Am I the only one who the LSE confused for a certain 'Panda Tiger Aa-Kung Fu' studying social policy?"
One student said that at first he thought his application had been messed up: "However, I couldn't imagine anyone being named Mr Panda Tiger Test Test Aa-Kung Fu, so I ignored it."
However one student was on holiday in China when he received the email and said that while he could "certainly see the funny side", he was worried "by the flagrant racial stereotyping which the LSE have seemingly refused to apologise for in their vague follow-up email".
Others were disappointed that the university spotted the mistake and sent out a follow-up apology email within 20 minutes.
"Everyone needs a good laugh once in a while," said one, while another added: "Shame the apology came through so soon, they take themselves way too seriously."
An LSE spokeswoman said: "A welcoming email that LSE sent out to some successful applicants contained an error as a result of a technical problem with coding in the database used.
"This meant that the email did not pick up some of the fields correctly.
"For example, instead of inserting the applicant's name, the email included the name from a test record which is 'Kung Fu Panda'.
"The use of this 'name' merely reflects that a member of staff who set up the test record is a fan of the film.
"The email was sent to all students and did not target students from any particular background."
The university says that other test names used include Piglet, Paddington, Homer, Bob and Tinkerbell.
A top London university has apologised to students after a welcome email addressed them as Kung Fu Panda.