The team had reportedly narrowed down its search between Casey and John Beillin of the University of MI last week.
"In our meetings he displayed great insight into what this roster can accomplish, and great passion about our city and the team's role in bringing people together", Mr. Gores said.
Casey is the front-runner for the NBA's coach of the year award to be presented later this month.
Pistons owner Tom Gores had virtually cleaned house, by parting ways with Van Gundy shortly after the end of the regular season and then with general manager Jeff Bower, giving this front office a completely different look, and determined to separate coaching from basketball operation.
Earlier this year, the Raptors celebrated their 300th win under Casey, who also helped pave the way to their first-place finish in the Eastern Conference. "He embodies our culture and will be a great representative for our franchise".
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Casey was the head coach of the Raptors since 2011, and took them to a conference finals appearance in the 2016 playoffs. The NBA coach of the year finalist was sacked shortly after Toronto was swept by the Cleveland Cavaliers. He was named Eastern Conference Coach of the Month five times, and last February, became the first coach in Raptors history to be selected to coach in the NBA All-Star game.
"After careful consideration, I have decided this is a very hard but necessary step the franchise must take", Ujiri said in a press release. Casey also coached the Timberwolves from 2005-07, where he amassed a 53-69 record. Toronto won four Atlantic Division titles during Casey's tenure. Part of getting the Pistons back on track will be fixing their offence, which ranked 22nd in both field goal percentage and points per game last season.
The Pistons move means that there's only one vacant head coaching job left in the National Basketball Association - with the Raptors. During his junior season, the Wildcats amassed 30-2 record and captured the 1978 NCAA Championship.
Casey earned a degree in business administration in 1979.