Fisher was a member of five NBA championship teams while with the Lakers and is in his 16th season in the league.
"I want to express my deepest gratitude to Derek for everything he has meant to this organization over the years," said Lakers owner Dr. Jerry Buss. "Few who have worn the Lakers uniform have done so with as much class as Derek, both on the court and in the community.
"Derek will always hold a special place not only in my heart, but in the heart of Lakers fans everywhere."
Fisher is averaging 5.9 points and 3.3 assists a game this season. He has made the second-most 3-point shots in team history (846) and his 915 games played is fifth on the Lakers' all-time scoring list. He has played in 538 consecutive contests.
Hill is in his third year out of Arizona. He was taken by the New York Knicks with the eighth overall pick in the 2009 draft.