The team announced the decision shortly after multiple reports of his dismissal Sunday evening.
According to The Athletic's Shams Charania, they are hiring Toronto Raptors assistant Chris Finch to take Saunders' place. Finch will join the Timberwolves as their full-time coach, not on an interim basis, according to the report.
Hobbled Timberwolves have NBA's worst record
Saunders, 34, was in his third season coaching the Timberwolves. He's the son of late former Timberwolves head coach Flip Saunders, who coached the team for 11 seasons over two stints, including a 10-year run from 1995-2005 during the Kevin Garnett era.