Dallas finished 34-37-11 for 79 points in Ruff's fourth year with the team—good enough for sixth place in the central division.
"I want to personally thank Lindy for his commitment and professionalism over the four years that he served as our head coach in Dallas," general manager Jim Nill said. "Lindy is not only a highly respected coach, he more importantly is a great person and an outstanding family man whom I have the utmost respect for on and off the ice."
The Stars had reached the Stanley Cup playoffs twice in Ruff's four years with the organization, winning just a single postseason series. The team led the Western Conference with 109 points last season but only reached the second round before falling to the St. Louis Blues.
Aside from the strike-shortened 2012-13 season, the 79 total points this year were the fewest for the franchise since 1996.
The 57-year-old coach spent the previous 15 years with the Buffalo Sabres and has 736 total wins in 1,493 career games.