Dario Gradi says he accepts the decision and apologises again to Barry Bennell's victims.
Bennell, who worked at Crewe and Manchester City in the '80s and '90s, is serving a 34-year sentence for 50 charges of historical child sexual abuse.Gradi, now 82, was suspended in 2016 pending an investigation by the FA and retired as director of football at Crewe three years later.
But it said he should have investigated rumours about the coach, monitored what was going on, and spoken to the boys who were staying with Bennell to check they were OK. Living recipients can have the honour withdrawn if they fail to meet that expectation, for instance because of a criminal conviction or bringing the honours system into disrepute.
A Forfeiture Committee will investigate in these instances and if it decides the honour should be forfeited, that recommendation is submitted through the Prime Minister to the King.