In yet another example of racism in Italian football, Sacchi hit out at the number of foreign players and non-ethnic Italians playing for Italian clubs at this month's Torneo di Viareggio, which is considered one of the premier youth football tournaments in the world.
While Sacchi, who famously coached Milan to successive European Cup titles and was in charge of Italy when they finished runners-up at the 1994 World Cup, laughed off suggestions he is racist, his comments follow an ugly trend in Italian football.
"Italy now has no dignity or pride, because we have too many foreigners playing in the Primavere [the under-20 league]," Sacchi said, according to La Gazzetta dello Sport.
"In our youth sectors there are too many blacks."
In last year's presidential election for the Italian Football Federation, Carlo Tavecchio was elected despite comments during his campaign about the influx of foreign players in Serie A, using the term "banana eaters".
Monkey chants have previously been directed towards Italy striker Mario Balotelli when he was playing for Milan, while Ghana international Kevin-Prince Boateng led the same club off the field in 2013 during a friendly with fourth-tier Pro Patria due to similar abuse.
Sacchi argued that having signed Netherlands international Frank Rijkaard - who is of Surinamese background - during his stint in charge of Milan, he is not racist.
"I'm certainly not racist, as my coaching history demonstrates with Rijkaard," he said.
"But look at the Viareggio tournament. I would say that there are too many coloured players, also in the under-20 teams in Italy."
Sacchi then claimed he had been misunderstood.
"I've been misinterpreted, you think I'm really racist? All I said was I saw a game featuring a team who fielded four coloured players," the 68-year-old said.
"My history speaks for itself, I've always coached teams with great players from every colour and I've signed a lot, whether to Milan or [Real] Madrid.
"I only wanted to underline that we [Italy] are losing our national pride and identity."
