According to the Sacramento Bee, Hayes was found to have a heart abnormality in an echo stress test.
Kings president of basketball operations Geoff Petrie said in a statement Monday that notifying Hayes of the news was "one of the most heartbreaking moments of my professional or personal life."
Hayes signed a four-year, $21.3 million deal on December 9.
The 28-year-old averaged 7.9 points and 8.1 rebounds in 74 games with Houston last year. Hayes had been with the Rockets since entering the league in 2005-06.