"This was a very tough decision, but we're confident that the agreement reached today represents the most productive path forward, both for Jimmer and the Kings," Kings general manager Pete D'Alessandro said.
Fredette, the 10th overall pick in the 2011 NBA Draft out of Brigham Young University, was averaging 5.9 points and 1.5 assists in 11.3 minutes per game over 41 games coming off the bench.
He has career NBA averages of 7.0 points, 1.5 assists and 15.0 minutes per game in 171 career contests with Sacramento.
Sacramento also announced the signing of guard Orlando Johnson to a 10-day contract.
Johnson averaged 2.4 points in 9.0 minutes per game with Indiana this season before being waived on February 20.
Originally drafted by the Kings in the second round (36th overall) of the 2012 NBA Draft, Johnson's draft rights were traded to the Pacers for cash considerations on draft night.