The team relieved him of his coaching duties on Friday morning in a move that was declared "mutually agreed to" by both parties, according to a team news release.
The Suns have a 13-28 record and are in last place in the Western Conference. If they were in the Eastern Conference, they'd have three teams below them.
Gentry, who also coached the Miami Heat and Detroit Pistons, had a 158-144 record since taking over for Terry Porter during the 2008-09 season's All-Star break. The Suns went 58-24 in 2010 with Steve Nash still running the show, losing to the Dallas Mavericks in the Western Conference finals.
The Suns will choose an interim coach in the next two days, according to the news release.
Gentry, who was in the final year of his contract, joined the Suns coaching staff as an assistant under Mike D'Antoni.