Speaking at an awards ceremony in Tuscany, the 68-year-old appeared to take issue with the number of foreign players in the country.
Sacchi, who has also coached AC Milan and Real Madrid, was quoted by La Gazzetta dello Sport as saying: “I’m not racist and my history as a coach shows that, but watching at the Viareggio Cup (a youth football tournament) makes me think there are too many players of colour.
“Business interests now come first. Italy has no dignity, it has no pride: you shouldn’t have squads including 15 foreigners.”
Sacchi has employed black players during his career, with Frank Rijkaard and Ruud Gullit playing alongside fellow Netherlands international Marco van Basten as part of a successful attacking trio at Milan, a factor he highlighted when trying to clarify his comments.
“I have been misrepresented, do you really think I’m racist???? he later added in Gazzetta.
“I was just saying that I’d watched a match in which there was a team that included four boys of colour.
“My history speaks for itself, I’ve always trained teams with diverse players of colour and they won a lot, both at Milan and in Madrid.
“I just wanted to underline the fact that we’re losing our national pride and identity.”
In November, newly-elected Italian Football Federation (FIGC) president Carlo Tavecchio was banned from involvement with FIFA for six months after making derogatory comments about African players.
UEFA imposed a similar sanction on the 71-year-old but the FIGC cleared him of any wrongdoing.