Sparano, who was head coach of the Miami Dolphins from 2008 to 2011, spent just one season in charge of a Jets offense that ranked 30th in the league in total offense.
"At the end of the day, I wanted to move this team in a different direction offensively," head coach Rex Ryan told reporters at a news conference.
The Jets' (6-10) season was plagued by a quarterbacking controversy between ineffective incumbent Mark Sanchez and the hugely popular but unorthodox passer Tim Tebow.
A decision has yet been made on whether either quarterback will remain with the Jets.
The decision to release Sparano comes one day after the team parted ways with quarterbacks coach Matt Cavanaugh and a week after General Manager Mike Tannenbaum was fired.