6:10pm: Karl's agent, Warren Legarie, offered his thoughts to ESPN about the Nuggets' decision:
"This was not the ideal situation, obviously George would've preferred to stay on. But I can't praise Josh Kroenke enough for the way in which he handled a really difficult situation. [Kroenke] was always straightforward and honest & very clear about what they were prepared and not prepared to do" (All Twitter links via Ramona Shelburne).
10:11am: 2012/13's NBA Coach of the Year will not return to his team's bench next season, according to Adrian Wojnarowski of Yahoo! Sports. Wojnarowski reports that the Nuggets have parted ways with George Karl, informing him this morning that he won't be retained for the final year of his contract (Twitter links).
Wojnarowski and Ramona Shelburne of ESPNLosAngeles.com had both reported within the last week that Karl's status in Denver was unsettled, since the team didn't seem inclined to pick up his 2014/15 option, which would have left him on an expiring deal next season. According to Wojnarowski (via Twitter), Karl had been pushing for a contract extension, and team ownership wasn't prepared to give him one.
The move is the latest in an incredibly busy offseason for head coaching turnover. 11 NBA teams have now parted ways with the head coach with whom they finished the season, and there could be more changes on the way, including Lionel Hollins in Memphis. Karl had been the third-longest-tenured coach in the NBA, behind only Gregg Popovich and Doc Rivers.
With Karl out of the picture and Masai Ujiri now running the Raptors, the Nuggets will be in the market for both a new coach and general manager in the coming weeks. Wojnarowski tweets that the Nuggets believe they can attract an elite coach, given their roster, and that they preferred to take that chance rather than moving forward with an unhappy Karl.
As for Karl, Chris Mannix of SI.com rightly points out (via Twitter) that his presence on the market figures to change the thinking of some teams still searching for a new head coach. Based on the fact that he had been seeking an extension with the Nuggets, it appears Karl still wants to keep coaching. We've already heard his name linked to the Clippers' search and Grantland's Zach Lowe (Twitter link) wouldn't be surprised if the Sixers called him as well. ESPN.com's Marc Stein reports (via Twitter) that the Grizzlies also intend to reach out to Karl.
Still, Rick Bonnell of the Charlotte Observer cautions (via Twitter) not to rule out the possibility of Karl sitting out the season or coaching overseas, given how much he enjoyed his previous experience in Europe. Personally, I'd think the former is more likely than the latter.