"The appointment by President-elect Trump of a racist individual like Mr. Bannon to a position of authority is totally unacceptable," Sanders said in a statement. "In a democratic society we can disagree all we want over issues, but racism and bigotry cannot be part of any public policy. The appointment of Mr. Bannon by Mr. Trump must be rescinded."
President-elect Donald Trump named Bannon his "chief strategist and senior counselor" over the weekend, placing him in one of the foremost positions of power in Trump's nascent administration.
Bannon's appointment has led to an outcry from many Democrats, who say Bannon is racist and bigoted.
More than 120 members of Congress signed a letter asking Trump to remove Bannon from any leadership roles in the White House.
Before being named as a senior member of Trump's administration, Bannon ran Breitbart News — a right-wing media outlet that Bannon himself said was a voice for the alt-right, a fringe segment of the Republican Party that holds white supremacism chief among its ideals.
Bannon has also been accused of domestic violence and anti-Semitism from an ex-wife in divorce proceedings.
Even Republicans, including Glenn Beck, have said Bannon is dangerous, and called for Trump to cut ties with him.
Trump, for his part, has not emerged from Trump Tower to comment on the uproar over Bannon.
However Jason Miller, a top Trump campaign official, said fears about Bannon are overblown.
"Steve Bannon is someone who's done a fantastic job implementing the president-elect's vision on the campaign trail," Miller said Wednesday, according to Trump's press pool. "He's someone I've had the opportunity to work with over the past three or four months, someone I've seen very high character from. Someone who's been a fantastic example of really being inclusive. Someone who's embraced diversity at every step. I think he'll do a great job working with chief of staff Reince Priebus."