Chemnitzer said there was "no room" for captain Daniel Frahn at the club after firing him for showing sympathy for a far-right extremist group.
The German third division outfit, who will play former European Cup winners Hamburg in the DFB-Pokal on Sunday, took their stance after injured striker Frahn was spotted sitting with members of the Kaotic Chemnitz group during a league fixture.
The game, away to Hallescher last Saturday, also saw 32-year-old Frahn with former members of the dissolved hooligan group NS Boys, Chemnitzer said.
Such behaviour was "massively harmful to the club", Chemnitzer said in a statement, adding: "Chemnitzer FC will continue to act consistently against any anti-constitutional ideas and their sympathisers."
The city of Chemnitz was severely affected by violence involving various groups in 2018, sparked by tensions surrounding Germany's immigration policy, and the football club has "committed itself in its shareholder agreement to being a bulwark against right-wing radicalism".
The club shareholders said: "With horror we have to recognise that our – now former – team captain Daniel Frahn has turned out to be a great sympathiser of the right-wing and inhumane group 'Kaotic Chemnitz' and thus caused great damage to the club. There is zero tolerance for this behaviour."
Chemnitzer had previously accepted an explanation from Frahn when, in March, he lifted up a t-shirt bearing the slogan 'Support your local hools'.
The phrase was linked to right-wing groups, but Frahn insisted at the time: "I'm not a Nazi and never will be."
Romy Polster, the deputy chair of Chemnitzer's shareholders' meeting, said after his sacking: "We now know for certain that it was the wrong decision to continue to trust him after his innocent protestations of his action on March 9, 2019.
"His remorse back then was a farce. He could not and did not want to take responsibility as a player and team captain in the football club, because there's one thing more than just scoring goals and cheering: attitude.
"There is total agreement that Chemnitzer FC dissolves the contractual relationship with the player with immediate effect. Daniel Frahn, for you there is no room at Chemnitzer FC."