Ward replaced former Calgary bench boss Bill Peters in November 2019 on an interim basis. The Flames went 24-15-3 under Ward last season before making him permanent head coach in September.
However, Calgary has struggled to carry over that momentum to this season. The team has won three of its last nine games while ranking 23rd overall with 2.71 goals for per game.
Sutter served as Flames head coach from 2002-2006, leading the club to the Stanley Cup Final in 2004. He last coached in the NHL with Los Angeles in 2016-17 and won a pair of Cups with the Kings.
Ward is the second head coach to be fired this season. The Montreal Canadiens dismissed Claude Julien on Feb. 24.