Red 2G is banned for use in food products as long term consumption of foods containing the ingredient poses the risk of cancer.
As part of investigation, CFS tested 17 samples of lucky bun from different retail outlets.
Two lucky bun samples from Yee Ma Bakery were found to contain Red 2G.
CFS spokesman said: "During follow-up investigation, FEHD staff also collected coloring matter stored in the bakery in question for testing.
"Result showed the presence of Red 2G, which is in breach of the Food Business Regulation."
The food safety regulator has ordered the bakery operator to stop the use of illegal coloring matter in lucky buns.
CFS said it will continue to follow up on the incident, and take appropriate action to ensure food safety and safeguard public health.
