Ferry's departure Friday after five seasons occurred two weeks after the club fired coach Mike Brown following the team's second-round loss to the Boston Celtics in the NBA playoffs. It also comes as the team is making plans to try to re-sign two-time MVP LeBron James, who will be a free agent next month.
Ferry was in the final month of his contract. He said the decision not to renew his contract was a mutual one with owner Dan Gilbert.
"I thought it was important that there was as much clarity as possible in the organization at this time, so things could start moving forward," Ferry told The Associated Press. "It's important then whomever is hired as the head coach knows, feels and understands the people he is going to work with."
Assistant GM Chris Grant will take over for Ferry, who played in Cleveland for 10 years and became the club's GM in 2005.
Ferry did not give any specifics about the reasons behind him leaving. It was assumed he would remain with Cleveland, an organization now undergoing a massive overhaul just as James is set to enter the free-agent market.
James was not available to comment on Ferry's exit.
On a conference call, Gilbert said the moves to fire Brown and split with Ferry were necessary to help the team get to attain its goal of an NBA championship.
"You've got to take some risks, calculated ones," he said.
Gilbert said the organization has been in touch with James and he remains confident the Cavs can re-sign the superstar, who has spent seven seasons with Cleveland.
"We feel good about it," Gilbert said. "We feel like we have put the franchise in a great place for LeBron and all our players."
He said he would like to have a new coach in place by the start of free agency on July 1, "but I don't know if that can happen or not."
Gilbert said he will again hire a defensive-oriented coach, and insists any perception the Cavalier are in turmoil is untrue.
"The franchise is strong and in great shape from a business standpoint," he said, adding that renewals for season tickets and luxury suites were at record levels.
Cleveland's decision to fire Brown, with whom Ferry worked in San Antonio, may have created a divide between the GM and Gilbert. Ferry, though, said there were no hard feelings with Gilbert, who hired him as Cleveland's eighth GM on June 27, 2005.
"It is the right time to move on," Ferry said. "Chris is prepared to do a great job. This will be a natural transition for him. He's done everything that a GM does at every level."
Ferry led the Cavs through the most successful period in their history, peaking with the club's first finals appearance in 2007.
But despite winning 127 regular-season games and having the league's best record the past two seasons, the Cavaliers fell short of a title, losing to Orlando in the Eastern Conference finals last season and to the Celtics last month. And now, they're on the verge of possibly losing James.
The club went 272-138 during Ferry's five seasons.
Ferry said the club's strategy to re-sign James will not be affected by his departure.
Grant almost left the Cavs two years ago to take the GM job in Atlanta, where he spent nine seasons working in a variety of roles with the Hawks.
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