"We find Manny Pacquiao's comments abhorrent," a Nike spokesperson said in an emailed statement. The sportswear company also said it opposes discrimination and supports the rights of lesbian, gay, bisexual and transgender people.
Pacquiao earlier this week denounced gay relationships in a TV interview in the Philippines, according to TMZ.com. "They know how to distinguish male from female. If we approve [of] male on male, female on female, then man is worse than animals."
The remarks drew fire from on social media. "I lost all respect for you," wrote Jason Collins, the first openly gay NBA player, wrote on Twitter. "Bigoted people like you (& yes you are one) should never hold an office in politics."
Pacquiao, 37, is running for a seat in the Philippines senate.
A petition on Change.org that urged Nike to drop Pacquiao also drew thousands of signatures, highlighting the public relations risk for the company.
Gay advocates praised Nike's decision to cut ties with Pacquiao, one of the most celebrated boxers in history.
"Nike's step today is in line with its long commitment to equality -- a commitment that is truly walking the walk," said Deena Fidas, head of the workplace-equality program at the Human Rights Campaign Foundation, by email. "Quite simply, homophobic or anti-LGBT remarks have no place in a successful business or its spokespeople."
Pacquiao on Tuesday expressed regret for the slur, saying in a statement posted on his Twitter feed that "I'm sorry for hurting people by comparing homosexuals to animals. Please forgive me for those I've hurt."
On his Facebook page, Pacquiao also said he remains against same-sex marriage, while insisting that he is "not condemning" LGBT people. "God Bless you all and I'm praying for you," he wrote. Pacquiao, who has previously come out against same-sex marriage, also cited several Biblical passages against homosexuality.
Pacquiao is scheduled to square off against Timothy Bradley on April 9 in Las Vegas in what some boxing observers say could be the Filipino boxer's last fight.
TMZ earlier reported that Nike planned to end its contract with Pacquiao. Nike sells t-shirts, shorts, shoes and other gear emblazoned with the fighter's brand, "Team Pacquiao."