"I would like to thank Kevin O'Neill for his four years of service to USC," Haden said in a released statement. "He took over a program under difficult circumstances because of our NCAA issues and, despite that, he was able to do some good things.
Assistant coach Bob Cantu will take over as interim coach.
O'Neill, in his fourth year with the Trojans, is 7-10 this season, 2-2 in Pac-12 play. The Trojans recently snapped their 14-game losing streak on the road by defeating Utah.
"It was hard for me to evaluate him as a head coach until this year when he had enough players and veterans to compete," Haden said. "As the season progressed, it became evident to me that we needed new leadership in our men's basketball program."
O'Neill's USC career ends with a 48-65 record.