Hayes, who played his first six NBA seasons with the Houston Rockets, signed a four-year free agent deal with the Kings for$21.3 million.
"This morning, in one of the most heartbreaking moments of my professional or personal life, Chuck Hayes was notified that he failed his physical exam with the Sacramento Kings," Kings general manager Geoff Petrie said.
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"Subsequent to that, the contract signed on December 9 has been voided."
Petrie said Hayes asked the team to make no further comment.
Hayes had undergone more testing after last week's findings before the decision to void his deal was made. He did not play in Sacramento's pre-season opener last Saturday at Golden State.
In six NBA seasons with the Rockets, Hayes averaged 3.4 points and 4.7 rebounds a game.
