"While the investigation is continuing and no charges have been filed against the University of Louisville or any of its employees, the allegations are serious," Louisville's interim president, Greg Postel, told a news conference.
"It is vital for this university to strictly adhere to NCAA rules and enforce federal law. Doing nothing would be a tacit endorsement of unethical and criminal behaviour," he added.
Postel said Pitino's employment with the men's program will be reviewed at a later date and that he hopes to name an interim replacement for him and athletic director Tom Jurich, who was also put on leave, in the next 48 hours.
The scandal, which has rocked college basketball, involves at least four men's assistant college coaches from around the country and an Adidas AG executive.
Pitino's lawyers said in a statement their client was effectively fired.
The lawyers said information disclosed in the investigation is insufficient to implicate Pitino in any type of misconduct or other activity that would violate the terms of his contract.
"Coach Pitino has done nothing wrong and there is no evidence to suggest otherwise. The rush to judgment is regrettable," the statement said.
This is the latest scandal during Pitino's 16-year stint with Louisville.
The National Collegiate Athletic Association sanctioned the school after investigating the use of strippers and prostitutes to attract players to the men's basketball program. The team must vacate wins that could include the 2013 national title. The university is appealing the NCAA's decision.
Pitino also admitted in 2009 to having sex with the wife of a Louisville equipment manager, and having paid for her to have an abortion. Pitino said he was being extorted, and the woman was later convicted.
Pitino, 65, took over at Louisville after spending four seasons with the National Basketball Association's Boston Celtics. Prior to that he was a coach at the University of Kentucky, where he led the men's basketball program back to prominence and won a national title in 1996.
(Reporting by Frank Pingue in Toronto; Editing by Jonathan Oatis and Lisa Shumaker)
