Woodson, who was in the last year of his contract, compiled a 206-286 record in six seasons with Atlanta. The Hawks' record improved each season after a 13-69 mark the first year, hitting 53-29 this year. They made the playoffs each of the last three seasons, reaching the second round this year.
"After careful consideration, we have made a difficult decision regarding Coach Woodson's contractual status," Hawks General Manager Rick Sund said in a statement. "We're grateful for Mike's contributions over the last six years and we want to wish him the very best."