New Indiana coach Archie Miller will make $24 million under his seven-year deal, and potentially even more in bonuses.
Tom Crean spent nine seasons as the head coach of the men's basketball team.
According to a statement, IU will begin an immediate national search for a new coach.
Indiana beat rival Kentucky Saturday night in Des Moines, advancing to the Sweet 16 for the first time since 2013.
As Kentucky and Indiana prepare for their clash on Saturday, Indiana athletes downplay the rivalry while magnifying the game's significance.
Nearly 20 percent of Hoosier fans used foul language when talking about their team on Twitter.
Indiana Men's Basketball defeated Purdue University, 77-73, Saturday night at Assembly Hall. The win kept the Hoosiers on top of the Big Ten.
Indiana Men's Basketball defeated Nebraska 80-64 at Assembly Hall on Wednesday night, taking back a share of first place in the Big Ten with four games left.
A new banner is hanging in Assembly Hall tonight. The banner celebrates the 1976 IU basketball team that went undefeated and won a national championship.
Blackmon had surgery this past summer on his left knee, but fully recovered before injuring his right knee in practice last week.