Arenas was suspended indefinitely without pay Wednesday by the NBA commissioner, who determined the player's behavior made him "not currently fit to take the court."
A day after the Washington Wizards guard was photographed before a game in Philadelphia pointing his index fingers, as if they were guns, at his teammates, Stern warned the former All-Star that his conduct will "ultimately result in a substantial suspension, and perhaps worse."
Arenas is under investigation by federal and local authorities after admittedly bringing guns to the Wizards' locker room. Stern originally planned to wait to take action, but he tired of Arenas' behavior.
"The possession of firearms by an NBA player in an NBA arena is a matter of the utmost concern to us," Stern said.
"Although it is clear that the actions of Mr. Arenas will ultimately result in a substantial suspension, and perhaps worse, his ongoing conduct has led me to conclude that he is not currently fit to take the court in an NBA game," Stern said in a statement. "Accordingly, I am suspending Mr. Arenas indefinitely, without pay, effective immediately pending the completion of the investigation by the NBA."
The punishment came on his 28th birthday.
"I feel very badly that my actions have caused the NBA to suspend me, but I understand why the league took this action," Arenas said in a statement through his attorney. "I put the NBA in a negative light and let down my teammates and our fans. I am very sorry for doing that."
Arenas added that he had called Stern to apologize.