Alexandra Burke says she was told to bleach her skin "to look whiter" and have "hair that appeals to white people" in order to sell more records.
The Hallelujah singer spoke out in a 15-minute video on Instagram, telling her 193k followers: "I'm nervous, but I'm not ashamed to speak about it".
She says she has experienced numerous acts of racism in the music industry and is "speaking her truth" after staying silent for years.
Burke first came to public attention after appearing on the X Factor - which she competed in twice. The first time in 2005, when she was 16.
She made it through to the final seven in the 16-24 category but didn't progress any further.
Speaking about the experience she said an "unnamed person" told her she had not made it through but said if she called them in a few months they would sign her.
She said when she made the call, the person told her: "I already have one black artist, I don't need another."
Burke said: "I wasn't sure how to take that, to be honest. It sucked. It really, really sucked to hear those words - because of your skin colour, you now can't have this opportunity that was promised."
Wearing a T-shirt with the slogan "I am enough", Burke says she isn't pointing the finger at any specific person and doesn't identify the name of anyone she refers to in her video.
Burke also speaks about winning the fifth series of X Factor in 2008.
Image: Alexandra Burke (2nd left) beat Eoghan Quigg (left), Diana Vickers (3rd left) and JLS (right) to win X Factor
After getting her big break aged 19, she says she was told: "Because you're black, you are going to have to work 10 times harder than a white artist because of the colour of your skin.
"You can't have braids, you can't have an Afro, you can't have anything that is basically my identity. You have to have hair, for example, that appeals to white people so people can understand you better.
"I got told to bleach my skin, and that was something I refused to do, because it just is absurd to me that somebody could even remotely say to someone 'bleach your skin so you could look whiter'.
"Still to this moment, it breaks my heart that I was told that."
She also said a previous record label told her: "You can't have baby hairs showing on any hairstyle that you do because you look aggressive." She says she decided to leave the label for that reason.
Image: Burke made it to the Strictly final in 2017, the year her mum died
Now aged 31, she remains upset with herself for "allowing that" and for not speaking out sooner.
Burke says she has been inspired by 2011 X Factor contestant Misha B, who last week posted a video saying the X Factor forced an "angry black girl narrative" onto her.
She also spoke about making it to the 2017 Strictly Come Dancing final.
She says she was accused of "being a diva" by one male journalist after saying she didn't want to do any publicity during a red-carpet event, filmed on the day her mother died.
Image: Burke singing with her mother Melissa Bell in 2009
She credited her late mum, Soul II Soul singer Melissa Bell, with bringing her up to be "a strong independent black woman".
Burke said: "I'm very, very proud to be a black woman, extremely proud. I'm proud of my culture, my heritage, I'm proud of what my family have done, what they sacrificed for us as kids to be in this industry."
She went on to say several labels and management companies have told her: "Because you're a black girl, you won't make it that far in the industry... if you were white, you would be bigger than what you are now, you could sell more records, you'd be a Brit Award winner."
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She also referred to the "many trolls" she has experienced online, telling them their comments do "make us feel s***", and urging them to "be kind".
Burke said she has "wasted time" not speaking about her experiences sooner, but said "now that this movement is happening, I feel that it is the right time to speak up and not be afraid to do it".
Sky News has approached X Factor for comment.