Speaking with CNN's Suzanne Malveaux, Sanders labeled the transaction "not a good idea" and said he was "sorry President Obama made that choice."
"I just think it does not look good," Sanders said. "I just think it is distasteful -- not a good idea that he did that."
While campaigning for the Democratic presidential nomination, Sanders, a hugely influential voice among progressives, often criticized opponent Hillary Clinton
for her paid speeches to Wall Street banks. Many times, the senator demanded the former secretary of state release transcripts of those appearances.
"Look, Barack Obama is a friend of mine, and I think he and his family represented us for eight years with dignity and intelligence," Sanders said. "But I think at a time when we have so much income and wealth inequality ... I think it just does not look good."
"It's not a good idea, and I'm sorry President Obama made that choice," he added.
Sen. Elizabeth Warren -- another influential progressive -- has also expressed concern over Obama's speech
, saying Thursday that the former President's decision "troubled" her.
Despite the objections, an Obama spokesperson dismissed the idea that the large speaking fee compromised the former President's convictions.
"As we announced months ago, President Obama will deliver speeches from time to time," Eric Schultz, a senior adviser to Obama, said in a statement Wednesday. "Some of those speeches will be paid, some will be unpaid, and regardless of venue or sponsor, President Obama will be true to his values, his vision, and his record."
"With regard to this or any speech involving Wall Street sponsors, I'd just point out that in 2008, Barack Obama raised more money from Wall Street than any candidate in history -- and still went on to successfully pass and implement the toughest reforms on Wall Street since FDR," he added.
Schultz added that Obama will continue to focus most of his post-presidency on writing a book, giving speeches and "training and elevating a new generation of political leaders in America."