Kentaro Kobayashi, the show director for the Tokyo Olympics opening ceremony, has been sacked over a decades-old comedy sketch evoking the Holocaust, according to organisers, in the latest setback for the pandemic-affected Games.

On the eve of Friday's event, the video of the 1998 skit in which Kobayashi made the remark surfaced online.

In the routine, Kobayashi and a comedy partner impersonate two well-known children's television entertainers.

"It came to light that during a past performance, (he) used language that mocked a tragic fact of history," Tokyo 2020 Olympic chief Seiko Hashimoto told reporters.

"The organising committee has decided to relieve Kobayashi of his post," she added.

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As they discuss a paper-based game, Kobayashi mentions some paper doll cutouts, referring to them as "the ones from the time you said 'let's play the Holocaust,'" causing the audience to laugh.

The two then make light of a television producer's outrage about the notion of a Holocaust event.

Some in Japan were taken aback by the sketch; others, though, questioned the public's reaction to a sketch that was made over two decades ago.

"It's inevitable that they'll face a fireball of criticism," wrote one online viewer, AFP reported.

Kobayashi issued an apology in a statement.

"In a video that was released in 1998 to introduce young comedians... a skit that I wrote contained lines that were extremely inappropriate," he said.

"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."

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Kobayashi, a well-known personality in Japanese theatre, is the most recent member of the opening ceremony team to be booted out.

Following an uproar over previous interviews in which he recounted bullying disabled schoolmates, a composer for the ceremony stepped down on Monday.

Hiroshi Sasaki, the artistic director for the opening and closing ceremonies, quit in March after recommending that a plus-size female comedian dress up as a pig. 

The Tokyo Olympics' grand opening is all set to take place on Friday. While the Olympic Games have always begun with a ceremony that features dramatic props, mass choreography, a cornucopia of lights, dances and actors, this year Tokyo’s opening ceremony will be one without grandiosity, owing to the ongoing coronavirus pandemic.