Fox won the AFC West all four of his years in Denver, but each of those seasons ended in ugly fashion in the playoffs, culminating with Sunday's 24-13 upset by Indianapolis.
Fox might already have something in the works with another franchise — he didn't shoot down a pregame report Sunday night that he could be available if the Broncos lost.
Neither Fox nor Elway would say what was discussed Monday when they met other than it was time to split up.
"It became clear that it was best for both the Denver Broncos and Coach Fox to move on and make this change," Elway said in a statement.
So, Fox is out after going 49-22 in Denver, including the playoffs, following a 78-74 record in nine years with the Carolina Panthers, counting the post-season.
Fox gathered his players at noon Monday but didn't talk about his own future. Chris Harris Jr. said Fox's message was "just that he appreciated everybody's efforts. He loved us and everybody just be smart in the off-season and make sure you take care of your body to be ready to come back ready to roll when OTAs start."
Two hours later, Elway met with Fox and told the assistant coaches they remain under contract but were free to pursue jobs with other teams.
The players had left when the news broke, and several reacted bluntly on Twitter.
"Cold World ...," wrote Demaryius Thomas.
"Wow ...," said Omar Bolden.
"Damn," tweeted Terrance Knighton.
The Broncos went 8-8 in Fox's first year, when Tebowmania was in full pitch. The stakes were raised when Denver won the Peyton Manning sweepstakes and replaced Tim Tebow in 2012.
Manning was murky about his future Sunday night, saying he had to process this latest loss before deciding whether to play an 18th NFL season. He wasn't in the locker room Monday.
Elway thanked Fox for helping "establish a positive, winning culture for this team" and said he "deserves a lot of credit for the Broncos' turnaround," but added "there is still work to be done" to win a Super Bowl.
Fox characterized his meeting with Elway as productive and honest and the two "mutually agreed that the timing was right for this decision."
"Although we came up short of our ultimate goal, I am proud of our team's many accomplishments during these last four years," Fox said in a statement. "It was an honour to coach the Denver Broncos, a first-class franchise with great fans and a winning tradition.
"I am eager to continue my coaching career and look forward to the opportunities that lie ahead," Fox added.
Fox became the only coach in NFL history to win a dozen consecutive divisional road games on his way to an unprecedented four straight AFC West titles in Denver. But the goal when Manning came on board was Super Bowl trophies. Instead, Manning is 2-3 in the playoffs with the Broncos.
Elway brought Fox to Denver in the aftermath of the Josh McDaniels era, saying he was looking for someone who could breathe some positive vibes into a locker room that had been beaten down as McDaniels' 6-0 start in 2009 turned sour and resulted in his firing midway through 2010.
Fox's first task was figuring out what to do with Tebow, and the coach's flexibility showed, when he completely remade his offence for Tebow after sticking him in the starting lineup in Game 6 of the 2011 season. Denver won seven of the next 11 games and finished 8-8, which was good enough to win the middling AFC West.
Tebow threw the winning touchdown pass to Demaryius Thomas in overtime in the wild card game against Pittsburgh, which set up an ugly — but understandable — 45-10 loss to New England in the divisional round.
Then came Manning, along with the Super Bowl aspirations that accompanied the future Hall of Famer's arrival.
The Broncos finished the 2012 regular season with 11 straight wins and were shocked when they lost 38-35 to Baltimore in double overtime at home in the divisional playoffs. Fox came under scrutiny after that one — too conservative — mostly for kneeling on the ball with 31 seconds left after the Ravens completed a long touchdown pass to tie the game.
But in 2013, at Manning's urging, the Broncos were anything but conservative — going to a hurry-up offence that helped Manning and the offence set passing and scoring records on their way to the Super Bowl. That beautiful season ended ugly, as Seattle clogged the passing lanes in a 43-8 victory — a result that compelled Elway to spend $60 million in guarantees on new defensive players, with the thinking that his quarterback shouldn't have to win it all by himself.
Those off-season changes mostly muted a debate about Fox's ability to get his team ready for big games, but the coach came under more scrutiny midway through 2014 when the Broncos revamped their offence, and started focusing on the run more.
Manning's attempts and completions went way down following a 22-7 loss to St. Louis in which Denver ran only nine times in 64 snaps. The Broncos looked more like a Fox team in the true, grind-it-out sense, winning the division for the fourth straight time and hosting a divisional playoff game for the third year in a row.
But for the second time in those three years, they were stunned at home.
There are several teams looking for a new head coach. Denver defensive co-ordinator Jack Del Rio has a second interview set up with the Raiders, and offensive co-ordinator Adam Gase interviewed with the 49ers, Falcons, Bears and Bills, who hired Rex Ryan. He might also get a look from Elway now.
AP National Writer Eddie Pells contributed.
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