The organization announced its decision to "mutually" part ways with coach Luke Walton after three seasons.
The length of Walton's deal will reportedly be line with that of Kings general manager Vlade Divac, which runs through the 2022-23 season.
Lue, who played for the Lakers from 1998-2001, spent four years with James in Cleveland, first as a Cavaliers assistant before taking over as head coach and leading the team to the 2016 title.
"We would like to thank Luke for his dedicated service over the last three years", said Lakers' General Manager Rob Pelinka in the official release.
Mississauga's R.J. Barrett to enter 2019 NBA draft
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A move to Sacramento then, with its young, raw roster, may be a better fit for Walton heading forward.
"Happy for Luke", Kerr told reporters in Oakland before a playoff game against the Los Angeles Clippers. "This franchise and the city will always be special to me and my family".
Beyond the early-season meeting, communication between Walton and the front office was fraught, sources told ESPN. There's confidence on both sides that a deal can be reached. It was a decision that had been rumored for a while and Johnson even alluded to it in the press conference when he resigned.
"I feel for Luke".
"I want my coach to be right next to me and we can talk about the team and what's out there for us to make our team better", Divac said.