"These guys paid for your way of life that you enjoy in Canada, these guys paid the biggest price."
Sportsnet president Bart Yabsley initially apologised for Cherry's comments on Sunday before the company released a statement announcing Cherry's departure on Tuesday.
"Sports brings people together - it unites us, not divides us. Following further discussions with Don Cherry after Saturday night's broadcast, it has been decided it is the right time for him to immediately step down.
"During the broadcast, he made divisive remarks that do not represent our values or what we stand for."
Following the announcement, Cherry told the Toronto Sun that he stood by his remarks.
"I know what I said and I meant it. Everybody in Canada should wear a poppy to honour our fallen soldiers.
"I speak the truth and I walk the walk," he said. "I have visited the bases of the troops, been to Afghanistan with our brave soldiers at Christmas, been to cemeteries of our fallen around the world and honoured our fallen troops on Coach's Corner."
Meanwhile, the NHL issued a statement critical of Cherry's remarks.
"Hockey is at its best when it brings people together," the league statement said. "The comments made last night were offensive and contrary to the values we believe in."
Mississauga Mayor Bonnie Crombie called Cherry's remarks "despicable."
"We're proud of diverse cultural heritage and we'll always stand up for it," she said on Twitter. "New immigrants enrich our country for the better. We're all Canadians and wear our poppies proudly."
- with AP.