Athletics director Norwood Teague announced the decision Monday and said it was time for a "fresh set of eyes" on the program.
Smith was 124-81 (.610) in six seasons at Minnesota, helping to bring the program back to respectability and ramping up expectations for a team hit hard by an academic cheating scandal.
Smith won 20 games five times. But he went just 46-62 in Big Ten play and never finished higher than sixth in the conference. The Gophers made three NCAA tournament appearances under Smith. They beat UCLA this year before losing on Sunday.
"Tubby has had a long and distinguished career and we feel it's time for a fresh set of eyes for our student-athletes and our program in general," Teague said. "We are grateful to Tubby and his entire staff for their hard work and dedication to this university, our students and the entire Minnesota community."
Smith was welcomed with wild enthusiasm when left powerhouse Kentucky in 2007, hailed as the savior to a program that Dan Monson was never able to raise back out of the abyss created from a the academic fraud that ended up wiping out the team's Final Four appearance in 1997.
Smith won 20 games his first season and took the team to the NCAA tournament the following year, restoring some sense of pride to a team that at one time was the most popular draw in the Twin Cities.
But the success seemed to level off after that. The Gophers made the tournament again in 2010, missed it in 2011 and settled for an NIT bid last year as fans started to grow impatient.
"I want to thank the University of Minnesota and the people of Minnesota for giving me the opportunity to lead the Golden Gopher basketball program for six years," Smith said in a statement provided by the school. "Our staff did things the right way and will leave knowing that the program is in far better shape than when we arrived."
This year's team started off 15-1 and rose as high as No. 8, with wins over Michigan State, Illinois and Memphis during that run. But they quickly came back down to earth, losing seven of 10 games in Big Ten play and squeaking into the tournament as a No. 11 seed thanks in large part to a late-season win over then-No. 1 Indiana at home.
The Gophers handled UCLA in the second round of the tournament only to be thumped by Florida in the next round. A common refrain from fans was that the players, and the team, never seemed to improve as the season went on, instead either stagnating or regressing. The Gophers never finished with a Big Ten record above .500 and finished in seventh place or worse four times in his six seasons.
Undaunted, Smith always pointed to his reputation for running a clean program and the empty cupboard he inherited when he arrived. He has long been lobbying for a practice facility and improvements to historic, but outdated, Williams Arena and has said the lack of investment in the facilities have led to some setbacks in recruiting.
"I don't apologize or I don't defend anything," Smith said last week. "We do the best we can. We do a good job. That's why we're NCAA bound."
The decision to part with a big-name coach after a rare tournament victory for the program is a bold one for Teague, who is in his second year on the job. It requires a cash-strapped athletic department to raise $2.5 million for Smith's buyout.
With a bevy of highly touted recruits in the state, Teague is acting quickly partially to give a replacement time to forge relationships with high school players including Apple Valley point guard Tyus Jones, one of the most sought-after juniors in the country.
Teague and his top assistant, Mike Ellis, are considered to be plugged in to the college basketball world and are believed to have a strong list of candidates to replace Smith at the ready.
Teague came to Minnesota from Virginia Commonwealth, and it has been speculated almost since his arrival that he would eventually bring Shaka Smart with him. But Smart may have higher profile suitors waiting for him as well with openings already at UCLA and USC.
Other names that could come up are former Timberwolves coach and Golden Gopher alumnus Flip Saunders, Villanova's Jay Wright and Marquette's Buzz Williams.