The colourful host vowed to sue ARN on Wednesday after it tore up his $100 million contract and ended the long-running Kyle and Jackie O Show.
The program was a ratings juggernaut on Sydney radio for more than 20 years but struggled to expand its reach into Melbourne and Brisbane.
Sandilands vowed to fight ARN, the parent company of KIIS FM, over the decision to end his contract.
"My lawyers told them last week this would be invalid," he said in a statement.
"And guess what? It is."
The series-ending move followed a "blue on air" with co-host Jackie "O" Henderson, something that happened "a hundred times in 25 years", Sandilands said.
"ARN took the situation and decided to try and burn the place down," he said.
"They wouldn't even let me pick up the phone to call her or anyone else on the show.
"Then - and this is the bit that gets me - once they'd made it impossible for the show to go on, they turn around and say, 'You didn't fix it. You're fired!'"
BlackBay Lawyers' managing partner Victoria-Jane Otavski told AAP the saga was shaping up to be a high-value contractual dispute.
"Quite clearly, he is alleging that ARN contributed to the breakdown of the situation," she said.
"It's going to bring a lot of focus on ARN's conduct and that's where it becomes legally contentious."
ARN announced Sandilands' contract termination on Wednesday morning in a statement to the ASX.
Shares in the company, which also operates the GOLD and iHeart brands in Australia, dipped about two per cent in early trade but later returned to Tuesday's closing price of 34 cents.
Prices have fallen 64 per cent since the 10-year deal was signed in November 2023.
ARN suspended the radio host on March 3 and issued him with a breach notice for serious misconduct after he berated Henderson on-air nearly two weeks earlier.
Sandilands denied he breached his contract.Â
ARN was in a potentially commercially risky situation given it "bet the farm" on the controversial presenter, prominent lawyer Michael Bradley said.
"The real issue here is the question of what (ARN) were buying and whether they can now turn around and say, 'well, he's done something we didn't expect,'" Mr Bradley, who is experienced in trade practice and celebrity litigation, said.
"It is difficult to see how the thing that he did ... was worse than any of the other outrages he's perpetrated on air over the years."
ARN said Henderson gave notice she could no longer work with her co-host, triggering an early March decision to terminate her $100 million agreement.
She reportedly denied ARN's version of events. Her management was contacted for comment.
The friction stemmed from Sandilands slamming his broadcast partner for looking into ex-prince Andrew Mountbatten-Windsor's horoscope.
"You're off with the fairies ... every segment, every time you've spoken, you don't even know what's going on," Sandilands said to Henderson during the broadcast.
He said on Wednesday he had apologised to his co-host of two decades immediately after the blow-up and had since offered to continue working with her or another presenter.
"(ARN) didn't want to fix this," Sandilands said.
"They thought they saw a chance to get out of the contract they signed with me a year ago and they ran with it."
The show was hit with repeated decency breaches on Monday after the regulator found ARN had lost control of its content.
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