Morey was at the centre of controversy in 2019 when he tweeted his support for the Hong Kong protests.
"We reiterate that any words and deeds that attempt to hurt the feelings of the Chinese people will have to pay a price", CCTV said in a statement on its website which was also read out on air.
The Rockets announced the move Thursday night, a little over a year after he sparked a rift between the National Basketball Association and Chinese government when he tweeted support for anti-government protesters in Hong Kong.
The 48-year-old, who signed a five-year extension in March last year, remains to the end of this month to help the Rockets complete their search for a new coach.
Bureau County reports 4th COVID-19-related death in past 7 days
The Miller County Health Center advised of a large increase in active COVID-19 cases in long-term care facilities Thursday. Statewide there have been 84,195 positive cases of the COVID-19 virus in Kentucky, and 1,296 total deaths from the virus.
According to Woj, the Rockets are planning to promote Rafael Stone, the current executive vice president of basketball operations, into Morey's position.
That tweet about China in my opinion was the nail in the coffin. NBA telecasts in China, however, resumed during the recent NBA Finals.
"The NBA will shut its doors to Morey for a long time, maybe forever".
The Rockets were considered title contenders prior to the season following Morey's acquisition of former league MVP Russell Westbrook in a deal that sent point guard Chris Paul to Oklahoma City. Despite that success, the Rockets have not been able to get over the hump and reach the NBA Finals. "If I have any questions or need his support, he's there for me and this organization ... he will be a Rocket forever".
The move comes after coach Mike D'Antoni told the team he would not return after the Rockets lost to the Lakers in the conference semifinals. "I wish him and his family all the best".
In their first season together in Houston, the Rockets clinched the fourth spot in the Western Conference with a 44-28 record in the regular season.