Fredette would be a free agent if he clears waivers.
Yahoo Sports first reported the sides were working on a buyout.
The Kings drafted Fredette with the 10th pick in 2011 after a sensational run at BYU, where he won The Associated Press' player of the year award his senior season. Fredette never lived up to the fanfare in Sacramento, though the franchise's instability -- playing for three different coaches and two different ownership groups -- didn't help his cause.
Fredette is averaging 5.9 points and 11.3 minutes this season, shooting 47.5 percent from the floor and 49.3 percent from 3-point range. For his career, he's averaging seven points, 1.5 assists and 1.1 rebounds while shooting 41.6 percent overall, including 40 percent from beyond the arc.
Fredette's time in California's capital city has been nearing an end since the Kings decided not to pick up a team option before this season on his contract for the 2014-15 season. Sacramento also tried to move Fredette before last week's trade deadline but couldn't get any takers.
Since Sacramento traded Marcus Thornton to Brooklyn for Jason Terry and Reggie Evans last week, Kings coach Michael Malone has said he wanted to use the remainder of the season to give rookie guards Ben McLemore and Ray McCallum more playing time. That move buried Fredette even further on the bench.
Jimmermania never took shape in Sacramento like the Kings had hoped.
Fredette led the nation in scoring at 28.5 points per game and guided BYU to the round of 16 in the NCAA tournament as a senior. Big performances in big games had NBA stars tweeting his name, President Barack Obama mentioning him while filling out his bracket and college basketball fans in a frenzy.
Hundreds of fans also greeted Fredette's arrival at the Sacramento airport after the Kings acquired him in a draft-day trade with Milwaukee as the No. 10 overall pick. Fans have remained vocal about Fredette, often screaming at games for him to play more -- and cheering louder for him than other reserves when he finally enters.
But the same concerns some scouts had about Fredette when he entered the league -- his defense, ball-handling skills and ability to create his own shot against bigger and more athletic defenders -- persist.
Paul Westphal was the only one of Fredette's three coaches committed to giving him extended minutes. Even that didn't last long.
Westphal was fired after a 2-5 start in Fredette's rookie season. Keith Smart and Malone both opted to go away from Fredette in favor of other guards, most notably Isaiah Thomas, who has outplayed Fredette since their rookie season.