The Kings named Joe Dumars the interim executive vice president of basketball operations, and he will also immediately assume Divac's duties on a temporary basis as the organization searches for a new GM.
It's "very possible" the permanent role won't be filled until after the October draft, a source told ESPN's Marc J. Spears.
Dumars could be considered for the GM job, Spears adds.
"This was a difficult decision, but we believe it is the best path ahead as we work to build a winning team that our loyal fans deserve," Kings owner Vivek Ranadive said. "We are thankful for Vlade's leadership, commitment, and hard work both on and off the court. He will always be a part of our Kings family."
Sacramento hired Divac as its vice president of basketball operations in 2015. He received a contract extension in 2019 that would've kept him with the organization through the 2022-23 campaign.
"It has been an honor and a privilege to serve as the General Manager for the Kings ... Sacramento and the Kings will always hold a special place in my heart and I wish them all the best moving forward," Divac said.
Sacramento failed to qualify for the playoffs and finished with a record below .500 during every season of Divac's tenure.
He notably traded former franchise center DeMarcus Cousins to the New Orleans Pelicans for a package headlined by shooting guard Buddy Hield. Divac's other significant transactions include drafting star point guard De'Aaron Fox and forward Marvin Bagley.
The Kings last qualified for the playoffs during the 2005-06 season.