Ferry had been working as a consultant for the Pelicans.
“We will immediately begin the process of restructuring our basketball operations department," Pelicans owner Gayle Benson said. "This will include a comprehensive, but confidential, search aided by outside consultants to identify a new leader of our basketball operations, directly reporting to me."
Ferry last worked as an NBA general manager with the Atlanta Hawks in 2014, when he took a leave of absence after a recording of him making racially insensitive comments about Luol Deng was leaked. He stepped down from the position in June 2015.
The 52-year-old also played 13 seasons in the NBA, splitting his time between the Cavs and San Antonio Spurs.