General manager Brad Treliving said he received a resignation letter from Peters on Friday that wraps up a weeklong investigation into the veteran coach's behavior. He refused to discuss whether Peters would continue to be paid, saying only, "He's no longer with the organization."
"We consider the matter closed," Treliving said at a news conference in Calgary. "It's been a difficult time. But we are going to move forward."
Peters did not immediately respond to a text. He was in the second season of a three-year contract.
Assistant Geoff Ward takes over as interim coach with the Flames 12-12-4 and in ninth place in the Western Conference.
Peters has not been on the ice or behind the bench with his team since former player Akim Aliu leveled the accusations of racist slurs Monday night on Twitter.
Treliving said he had been in communication with the NHL this week. The league said Friday its review is ongoing and is scheduled to meet with Aliu and others in the coming days.
Peters went from helping the Flames win 50 games and the Pacific Division title in his first season to perhaps having his career and future in the sport come to an end over questions about his coaching methods.
Asked if he thought Peters would coach hockey again, Treliving said he'd rather not speculate.
The allegations about Peters began during Calgary's 2-1 overtime loss at Pittsburgh on Monday.
Aliu alleged Peters "dropped the N bomb several times towards me in the dressing room in my rookie year because he didn't like my choice of music." It happened during the 2009-10 season while the two were with the Chicago Blackhawks' top minor league affiliate in Rockford, Illinois.
"That type of behavior just has no place," Treliving said Friday.
The allegations led to stern rebukes from team officials and the NHL even before they concluded their investigations.
Treliving called the allegations "repulsive" and said, "This is subject matter that has no place in our organization." The NHL called the alleged behavior "repugnant and unacceptable."
In a letter addressed to Treliving on Wednesday, Peters said he regretted such conduct and apologized to anyone harmed by it. Aliu called Peters' statement "misleading, insincere and concerning."
Flames forward Matthew Tkachuk said news of Peters' resignation was expected.
"I think that it was most likely the best outcome for what the team had put into their investigation and with the allegations and everything," Tkachuk said. "I mean this investigation took however many days and I felt they did a good job of it."
Flames captain Mark Giordano said the past four days have been tough and the only escape for the players was on the ice.
"At the end of the day all we can do as players is move forward. We know in society there's no place for that and the decision, however they came to it, was made," he said. "I think they did a good job."
Earlier this week, Hurricanes coach Rod Brind'Amour confirmed Peters physically abused his players behind the bench during his four years in Carolina. Brind'Amour, a member of Peters' staff, said "for sure that happened" in backing former Hurricanes defenseman Michal Jordan saying the coach kicked him and punched other players.
Brind'Amour said Peters' abuse stopped after players and support staff voiced their concerns to team officials. Peters coached the Hurricanes from 2014-2018.
Treliving oversaw the investigation this week and spoke to Aliu at least twice, among others.
Aliu acknowledged he rebelled against Peters and said the coach eventually asked Blackhawks executives John McDonough and Stan Bowman to send him to a lower minor league level.
The Blackhawks said nothing had previously been brought to their attention regarding Peters and Aliu before Monday. The team added it had no effect on any player personnel decisions involving Aliu.
The 54-year-old Peters made the jump to Rockford after leading the Western Hockey League's Spokane Chiefs to a Memorial Cup championship in 2008.
Aliu played under Peters during the 2008-09 and 2009-10 seasons. He was demoted to the Toledo Walleye of the ECHL during the 2009-10 season. Aliu, who was born in Africa but raised in the Ukraine and Canada, later played seven NHL games over two seasons with Calgary.
The 30-year-old Aliu has had a transient career since being selected by Chicago in the second round of the 2007 draft.
He's not playing this season after appearing in 14 games with Orlando of the ECHL last season. The Solar Bears were Aliu's 11th team over a six-year span, which included stops in Russia, Sweden and Slovakia.
Aliu's tweets came after reports surfaced of how poorly Maple Leafs coach Mike Babcock dealt with his players in Toronto before he was fired several days ago. Forward Mitch Marner confirmed that during his rookie season Babcock asked him to rank Maple Leafs players in order of how hard they worked. Babcock then shared Marner's list with numerous players.
Aliu noted Peters was Babcock's protege.
"For me it really hasn't sunk in yet and it's going to take a little bit of time," Ward said after Calgary's first home practice since the controversy began. "I'm still reeling from it myself. Our focus right now is trying to prepare to play the Ottawa Senators and all the other stuff for us has to stay in the background."