The knives, with a 2.5inch blade, are fastened to the inner lining of the Swiss-made Strellson jacket by a chain, which sits above an inside pocket where the knife is stored.
The hoody jacket, reduced to £59, is of the type worn by young teenagers although it is illegal to sell knives to people under 18.
Steve Gale, a TK Maxx shopper, was shocked when he discovered the jacket and knife while looking for a new coat.
He told The Sun newspaper: "I pulled the chain and out came this knife. I couldn't believe it. It was actually part of the coat.
"What has it come to when clothes become weapons? It's just encouraging kids to go out with a knife."
It is only a year after a TK Maxx shop assistant was stabbed to death 11 times at a store in Leicestershire.
Joan Holland, whose son Andrew was killed with a knife last year, told the Daily Telegraph: "It's horrendous. They’re promoting knife crime. It's sending the wrong message. The police say 'Don't carry knives', but TK Maxx sells them with a jacket.
"Someone could get hurt. I hope whoever came up with that idea gets a big fine."
However, TK Maxx said it has now taken the jackets off their shelves.
A spokesperson for TK Maxx, said: "TK Maxx supports and enforces all laws with regard to the sale of knives. We became aware that a branded coat on sale included a pocket penknife as a promotional gift.
"We removed the items swiftly from the supply chain. All store teams have been alerted to this and as a matter of urgent priority have removed all related items from shops."
Sports brand Nike was also entangled in the knife crime debate earlier this year because of its range of trainers called Air Stab.
The shoes, which launched as a limited-edition "retro" range two years ago, are based on a design from 1988 and carry the logo "Runnin' 'n' Gunnin".
Nike was forced to take the sneakers, which cost £90, out of distribution.