The embarrassing apology was prompted by the anonymous woman posting a contribution to the left-wing on Wednesday, accusing the prime minister of harassing and bullying her.
The woman said the hair-pulling started around last year's election and continued through until last month.
At first she believed it was playful and jolly, but when it continued - Mr Key sometimes pretended it was his wife Bronagh who did it - she became angry.
She said it was humiliating but it persisted and it wasn't until March that she got it to stop.
"How humiliating would it be to have to stand before the Prime Minister, his wife and security personnel and a handful of customers and say John, Mr Prime Minister, Sir, could you please stop tugging on my hair, I don’t like it, please stop, please… I felt I shouldn’t HAVE to do that."
Mr Key released a short statement shortly after the blog was posted.
"It's a familiar cafe which he regularly visits with Bronagh and both have a good relationship with those who work there. His actions were intended to be light-hearted. It was never his intention to make her feel uncomfortable and he has apologised to her."
She was dismissive of his apology offered with two bottles of wine, saying he had "scurried" across the cafe to give them to her.
The waitress wrote: "John seemed to think that his job demanded less professionalism than that of a waitress, yet he's the one that's running our entire country."
