Tokyo 2020 organisers on Thursday fired the show director for the Olympic opening ceremony on the eve of the event over a decades-old skit referencing the Holocaust, in the latest blow for organisers of the pandemic-delayed Games.
But the decision will not affect the details of the ceremony, organisers said.
Kentaro Kobayashi's comments in a video of a comedy sketch from 1998 emerged online overnight and sparked shock from some in Japan.
"It came to light that during a past performance, (he) used language that mocked a tragic fact of history," Tokyo 2020 chief Seiko Hashimoto told reporters.
"The organising committee has decided to relieve Kobayashi of his post."
In the sketch, Kobayashi and a comedy partner pretend to be a pair of famous children's TV entertainers.
As they brainstorm an activity involving paper, Kobayashi refers to some paper doll cutouts, describing them as "the ones from that time you said 'Let's play the Holocaust'", sparking laughter from the audience.
The pair then joke about how a television producer was angered by the suggestion of a Holocaust activity.
In a statement, Kobayashi apologised, describing the skit as containing "extremely inappropriate" lines.
"It was from a time when I was not able to get laughs the way I wanted, and I believe I was trying to grab people's attention in a shallow-minded way."
Kobayashi, a well known figure in theatre in Japan, is the latest member of the opening ceremony team to depart in disgrace.
The creative director for the opening and closing ceremonies, Hiroshi Sasaki, resigned in March after suggesting a plus-size female comedian appear as a pig.
And on Monday, a composer for the ceremony stepped down following an outcry over old interviews in which he described abusing disabled schoolmates.
A four-minute musical piece he composed was removed from the ceremony, but organisers said Kobayashi's departure would not alter the event.
Tokyo 2020 said it had "investigated" the content of the opening ceremony and determined that no single part "was specifically directed solely by Kobayashi".
"Tokyo 2020 is currently proceeding, as planned, with preparations for the Opening Ceremony."
The decision came after Prime Minister Yoshihide Suga called the content of Kobayashi's sketch "outrageous" and "totally unacceptable", but said the opening ceremony should nonetheless "be carried out as scheduled".
Details of the ceremony have been kept under wraps, and strict coronavirus rules mean only around 950 people will be in the stands of the 68,000-capacity Olympic Stadium for the extravaganza.
Tokyo 2020 has been plagued by a series of gaffes and missteps by Olympic officials, including Hashimoto's predecessor Yoshiro Mori, who resigned after claiming women speak too much in meetings.