Kuester, who compiled a record of 57-107 in two seasons, previously served one season in Detroit as an assistant coach under Larry Brown in 2003-04, helping the Pistons win the NBA championship.
"Decisions like this are difficult to make," Pistons president of basketball operations Joe Dumars said in a statement.
"I want to thank John for his hard work and dedication to the organization over the last two years, however, at this time we have decided to make a change."
The move came four days after new owner Tom Gores completed an agreement to purchase the team from Karen Davidson.
(Writing by Larry Fine, Editing by Brian Homewood)