Fox met with Broncos general manager and vice president of football operations John Elway on Monday afternoon, when the decision was made.
Before Denver's playoff game on Sunday, Fox Sports' Jay Glazer reported that there was a "pretty good chance" Fox would be available if the team lost. The Broncos went on to lose 24-13 at home to the Indianapolis Colts in the divisional round of the playoffs.
According to NFL Network's Jeff Darlington, Elway informed Denver's entire coaching staff that they have permission to look elsewhere, and that the new head coach will decide whether to retain them or not.
"On behalf of the Broncos, I sincerely thank John for his many contributions during his four seasons as head coach," said Elway. "He helped establish a positive, winning culture for this team and deserves a lot of credit for the Broncos’ turnaround.
"While we have made significant progress under Coach Fox, there is still work to be done. I believe this change at the head coaching position will be in the best interest of our long-term goal, which from day one has been to win world championships."
Fox has been Denver's head coach since 2011, leading the team to a 46-18 record in four seasons. The Broncos made it to the playoffs each year, reaching Super Bowl XLVIII last season and being eliminated in the divisional round the other three years.
Fox previously served as head coach of the Carolina Panthers from 2002 to 2010.
- Molly Geary