Pearn had begun his third season with Montreal, rejoining head coach Jacques Martin when he was hired by the Canadiens heading into the 2009-10 season.
He began his NHL career as an assistant coach with Winnipeg in 1995-96 and served under Martin in Ottawa from 1996-2004, and subsequently with the New York Rangers.
Canadiens GM Pierre Gauthier said in a statement that he had offered a different role with the team to Pearn, who was responsible for running the team's power play. Montreal, which is off to its worst start in 70 years, is 3 for 32 with the man advantage.
"He remains a very knowledgeable coach with a strong work ethic and is a true professional," Gauthier said.
Montreal has lost six in a row and has just one win through its first eight games (1-5-2). It is the deepest the Canadiens have gone into a season with only one win since 1941-42 when they got off to a 1-10-1 start that included a pair of losses to the Brooklyn Americans.