The team said that Towers has been offered another position with the organization and that he is currently evaluating his options.
Towers was hired in September 2010 and led the Diamondbacks to the National League West crown the following season. Arizona lost in the NLDS that year to the Milwaukee Brewers.
Towers spent 14 years as the San Diego Padres' GM before coming to Arizona.
The team hired former MLB manager Tony La Russa as the Chief Baseball Officer earlier this year in hopes of turning the franchise around.
"Over the past three months, I have had the opportunity to evaluate all aspects of our baseball operations and have decided to restructure our staff in order to improve our decision-making process," La Russa said in a statement. "I have the utmost respect for Kevin and a friendship with him that dates back many years, which has allowed me to appreciate his talents and experience."
LaRussa said Towers will wait to see who the team hires as its new general manager before he decides whether to return to the club.
The Diamondbacks finished 81-81 in both 2012 and 2013, but enter this weekend’s series against the Los Angeles Dodgers with a 59-81 record, second-worst in the National League.
In February, the team gave Towers and manager Kirk Gibson extensions.
Arizona has been plagued by injuries, losing starter Patrick Corbin to Tommy John surgery and first baseman Paul Goldschmidt to a left hand fracture.
- Scooby Axson