The team noted the late singer's accomplishments but said that recent uproar over lyrics in several of her songs prompted officials to decide to remove the statue.
"While Kate Smith's performance of 'God Bless America' cannot be erased from its place in Flyers history, that rendition will no longer be featured in our game presentations. And to ensure the sentiments stirred this week are no longer echoed, earlier today we completed the removal of the Kate Smith statue from its former location outside of our arena."
Paul Holmgren, president of the Flyers, said that team officials decided they had to do something.
"The NHL principle 'Hockey is for Everyone' is at the heart of everything the Flyers stand for," he said. "As a result, we cannot stand idle while material from another era gets in the way of who we are today."
Neither the team nor Holmgren disclosed how officials were made aware of the lyrics.
The Kate Smith statue was erected in 1987 outside the Flyers' former stadium and moved to its new stadium around 2011.
"God Bless America" played a big role in the team's history, with Smith herself singing the song at the 2010 Stanley Cup Finals in Philadelphia in 2010.
The team covered up the Smith statue last week with thick black cloth held in place with rope.
The team's decision followed that by the New York Yankees, a baseball team, to stop playing "God Bless America" at games.
Smith, who passed away at age 79 in 1986, was a major singer and radio star who appeared on a number of programs across the major networks and released dozens of successful recordings from the 1930s to the 1960s, including a number of songs that were popular nationwide. Her legendary status culminated in a Presidential Medal of Freedom in 1982, bestowed by then-President Ronald Reagan.
Smith's 1931 song "That's Why Darkies Were Born" was at the heart of the current controversy. In the song, she sings: “Someone had to pick the cotton, Someone had to pick the corn, Someone had to slave and be able to sing, That’s why darkies were born.”
“The song was likely satire. ‘That’s Why Darkies Were Born’ was first performed in 1931 through ‘George White’s Scandals,’ a series of Broadway revues. Reports say the song was considered to be satire, and revues are known as a collection of sketches with typically satirical themes. Singer Paul Robeson, who was black, also performed the song,” wrote columnist Madeline Fry.
“If ‘That’s Why Darkies Were Born,’ isn’t satire, the lyrics are inexcusable. As satire, it’s scathing, progressive commentary,” Fry added.
Clay Travis, a sports columnist, also slammed the decision.
At least one other song, "Pickaninny Heaven," was cited by critics who said Smith was racist.
Smith's family responded on Sunday after the Flyers removed the statue, criticizing the team for the move.
“Aunt Katherine was probably one of the kindest people I’ve ever met,” Andron added. “She was certainly anything but a prejudiced person. She loved everybody.”
Andron said that neither Smith nor her songs were racist and said the Flyers reacted too quickly.
“I think you need to go back and look back at your own history and what Aunt Katherine gave to that team,” she said.