Nieuwendyk's contract was set to expire at the conclusion of the 2013-14 season.
"Joe Nieuwendyk has represented the Dallas Stars extremely well as the club's General Manager and has helped put pieces in place that will once again turn this team into a contender," said Stars owner Tom Gaglardi. "I would like to thank Joe for his contributions to this hockey club and wish him and his family only the best in the future.
"However, I believe it is time to take this organization in a different direction with our intentions set on returning to the elite of the National Hockey League. My commitment to the Dallas Stars is unwavering, and I am confident we have found the right General Manager to return us to the pathway of success."
Dallas will introduce its new GM in a news conference on Monday.