Johnson had three years left on a five-year contract that the team offered after he guided the Mavericks to the NBA Finals in 2006. But Dallas is 3-12 in the playoffs since then, including a 1-4 mark this year in losing a first-round series to New Orleans.
Johnson's regular-season record, since he took over Dallas with late in the 2004-05 season, is 194-70.
"It is never easy to relieve a coach of his duties, especially one of Avery's caliber," said owner Mark Cuban. "He is a talented coach and I want to thank him for his efforts over the last four years and what he has done for this franchise. We wish him well in the future."
The Mavericks went 16-2 with Johnson in charge at the end of the 2004-05 season and then 60-22 en route to the NBA Finals in 2006. Johnson was voted the NBA coach of the year that season.