A source told the website it was a "mutual decision" between D'Antoni and the Knicks' front office.
This news comes after reports indicated Knicks superstar Carmelo Anthony was unhappy with D'Antoni as the team's coach.
Assistant coach Mike Woodson will take over the team on an interim basis, according to Yahoo! Sports.
This news follows a report this morning that Knicks star Carmelo Anthony has denied reports he wants to leave New York if the team is unwilling to part ways with head coach Mike D'Antoni before next season, the New York Post reported Wednesday.
The Post earlier reported that Anthony's discontent with the Knicks organization had become so severe after Monday night's loss to the Chicago Bulls, he told a confidant he preferred to be traded before Thursday's trade deadline.
But Anthony dismissed the report Wednesday morning, adding he and D'Antoni spoke to clear the air.