Gaudio, 53, went 61-31 in three seasons but just 1-5 in the ACC and NCAA tournaments and had four years remaining on his contract.
The timing of the decision, almost three weeks after the season ended and six months after Gaudio received a contract extension, left the Wake players, and recruits, in shock.
Gaudio, who went 27-21 in the ACC, did lead the Deacs to a first-round win over Texas in the NCAA tournament this season, but lost to Kentucky by 30 points in the second round.
In 2008-09, the Deacs reached No. 1 in the country in late January but the season ended with double-digit, upset losses in both the ACC and NCAA tournaments. Cleveland State, a No. 13 seed, beat a Wake team with two first-round NBA picks 84-69 in 2009 NCAA tournament.
Gaudio, an assistant at Wake for seven years, became the head coach after Skip Prosser's death from a heart attack. Gaudio's promotion kept together what was considered one of the top recruiting classes in the country, with Aminu as the centerpiece, and offered the program a measure of stability.