Sources told the New York Daily News that the Yankees suspended playing the song after learning of Smith's history of "potential racism."
Smith previously sang God Bless America before Flyers games in the 1970s. The Flyers played Smith's version of the song in their arena before playoff games, but have not done so since 2016.
Smith recorded several other songs, including Pickaninny Heaven, which cited "colored children." She also recorded That's Why Darkies Were Born, which had lyrics including: "someone had to pick the cotton."
"The Yankees have been made aware of a recording that had been previously unknown to us and decided to immediately and carefully review this new information," a Yankees spokesperson said. "The Yankees take social, racial and cultural insensitivities very seriously. And while no final conclusions have been made, we are erring on the side of sensitivity."
The Yankees initially stopped playing Smith's version in March, opting for an organ version of God Bless America. The team has played the song in the middle of every game since Sept. 11, 2001.
"We have recently become aware that several songs performed by Kate Smith contain offensive lyrics that do not reflect our values as an organization," the Flyers in a statement, according to CBS Philadelphia. "As we continue to look into this serious matter, we are removing Kate Smith's recording of God Bless America from our library and covering up the statue that stands outside of our arena."
Smith died in 1986.