Helmut Oberlander says he was forced to act as a translator for the squad and did not participate in atrocities.
He has fought three prior attempts by Canada to strip his citizenship and won.
His lawyer says Mr Oberlander will also fight this latest citizenship revocation, calling it "persecution".
A spokeswoman with Citizenship Canada said in a statement to the BBC that "we don't take citizenship revocation lightly, but it is necessary in cases of fraud and serious misrepresentation".
Canada says that when Mr Oberlander applied for entry to Canada in 1954, he obtained his citizenship by knowingly concealing that he had been an auxiliary of the Einsatzkommando, a force that operated behind the German army's front line in the Eastern occupied territories.
The squad is responsible for killing more than two million people, many of them Jewish people.
"We are determined to deny safe haven in Canada to war criminals and persons believed to have committed or been complicit in war crimes, crimes against humanity, or genocide," said Citizenship Canada's Lisa Filipps.
Mr Oberlander has argued in court that he was conscripted, had no alternative than to work for the Germans, and would have been subject to the harshest penalties had he disobeyed.
Canada has revoked his citizenship three times since 1995. Each time it was overturned on appeal.
In 2016, Canada's Supreme Court refused to hear the government's appeal of a lower court ruling that Ottawa should reconsider its decision to revoke Mr Oberlander's citizenship.
His lawyer Ronald Poulton says Canada "appears prepared to hound Mr Oberlander and his family to his grave".
"In order to find Mr. Oberlander complicit in war crimes, given his limited and forced participation with the German military, they had attempted to stretch fiction into fact and to rely on an outdated archaic principle known as guilt by association," he said.
Mr. Oberlander was born in Halbstadt, Ukraine in 1924, and he obtained his Canadian citizenship in 1960.
Shimon Koffler Fogel, with the Centre for Israel and Jewish Affairs, praised Canada for its "tireless" efforts to strip Mr Oberlander of his citizenship.
"This latest development is an important milestone in bringing a measure of justice to his many victims and their families," he said in a statement.
Mr Oberlander's case is expected to be back before a federal court within the next six months.