Morway relinquished most of his day-to-day duties around the same time the postseason ended. He hasn't been involved in draft or free agency preparation.
The move was expected, as the front office is reconfigured without president of basketball operations Larry Bird and Morway. Bird is expected to announce his resignation this week.
Morway was hired in 1999 and named general manager in April 2008.
"I've had a terrific 13-plus years with the franchise," Morway said in a team-issued release. "The performance of this year's team both on and off the court was incredibly rewarding. To experience Bankers Life Fieldhouse full to the rafters again, with an energy reminiscent of the late 90s, and to see our fan base re-engaged and proud made it all worthwhile.
"While I deeply care about this franchise, sometimes change is important for everyone concerned. For the past year I have carefully and thoughtfully considered my personal, family and professional goals. After discussing all of these issues with our owner, Herb Simon, and Larry, I believe this is the right time to step away."
The Pacers brought back former team president Donnie Walsh, who is likely to oversee the draft this week and free agency next week.