In the midst of a dismal season, the Nuggets announced that Shaw had been fired Tuesday. The move comes after six consecutive losses by a Denver squad that has posted a 20-39 record this season.
The former Lakers guard posted a 56-85 record in parts of two seasons with the club. Assistant Coach Melvin Hunt has been named the Nuggets' interim coach.
The move comes after Nuggets General Manager Tim Connelly told the Denver Post on Feb. 20 that Shaw's job "absolutely" was safe.
"I want to sincerely thank Brian for his time with our organization,” Connelly said in a statement. “You won’t find a better guy than Brian and he is one of the brightest basketball minds I’ve ever been around.
"Unfortunately things didn’t go as we hoped, but we know with his basketball acumen that he has a very bright future ahead of him."
Shaw was hired by the Nuggets in June 2013 to replace George Karl, who was fired at the end of the 2012-13 season despite being named the NBA's coach of the year.
Prior to joing the Nuggets, Shaw worked as an assistant coach with the Indiana Pacers.
Shaw broke into the coaching ranks as a Lakers assistant coach under Phil Jackson in 2005. He left the Lakers after the team did not hire him for its coaching vacancy following Jackson's retirement.
Shaw played four seasons with the Lakers, winning three NBA titles with the team before retiring in 2003.