West Ham have sacked head of recruitment Tony Henry following allegations he sent messages to an agent saying the club did not want to sign African players.
The Daily Mail claimed to have seen emails from Henry speaking disparagingly about players from Africa, recalling difficulties the club had with Senegalese striker Diafra Sakho.
It was reported that Henry had said African players "cause mayhem" when not selected in the team.
West Ham suspended Tony on Thursday morning after the story broke the previous evening and, following an investigation, they have decided to part company with the 60-year-old.
A club statement read: "West Ham United have terminated the contract of director of player recruitment, Tony Henry, with immediate effect following his unacceptable comments that were widely reported in the press.
"Our action follows a full and thorough investigation.
"West Ham United will not tolerate any type of discrimination.
"The West Ham United family is an inclusive one where, regardless of gender, age, ability, race, religion or sexual orientation, everybody feels welcome and included."
Speaking before Henry's dismissal, West Ham manager David Moyes sought to distance himself from Henry's alleged remarks.
Asked whether he had ever encountered difficulties with African players, Moyes told a news conference: " No, never. Joseph Yobo was my first signing at Everton, I think. I went to Joseph's testimonial in Nigeria.
"I signed Steven Pienaar three times. I don't think there is any club in the country that has more African players than West Ham."
The Football Association (FA) confirmed on Thursday that it was also conducting an investigation into the controversy.