Greg Wyshynski explains Barry Trotz and the Capitals couldn't agree on a contract and discusses a possible fit between Trotz and the Islanders. (1:21)

Washington Capitals head coach Barry Trotz has tendered his resignation from the team, becoming a free agent after leading the franchise to its first Stanley Cup on June 7.

"After careful consideration and consultation with my family, I am officially announcing my resignation as Head Coach of the Washington Capitals," Trotz said in a statement Monday.

"When I came to Washington four years ago we had one goal in mind and that was to bring the Stanley Cup to the nation's capital. We had an incredible run this season culminating with our players and staff achieving our goal and sharing the excitement with our fans. I would like to thank [Capitals owner] Mr. [Ted] Leonsis, [team president] Dick Patrick and [general manager] Brian MacLellan for giving me the opportunity to be a part of this great organization. I would also like to thank our players and staff who worked tirelessly every day to achieve our success," Trotz said.

"We are obviously disappointed by Barry's decision, but would like to thank Barry for all his efforts the past four years and for helping bring the Stanley Cup to Washington. Barry is a man of high character and integrity and we are grateful for his leadership and for all that he has done for our franchise," the Capitals said in a statement.

It was believed that Trotz did not have a contract after this season. There was a two-year extension on his contract if Trotz won the Stanley Cup. That extension was negotiated in 2014, at a time before head coaches like Mike Babcock of the Toronto Maple Leafs and Joel Quenneville of the Chicago Blackhawks exploded the coaches' salary market with blockbuster deals.

"His representative wants to take advantage of Barry's experience and Stanley Cup win and was trying to negotiate a deal that compensates him as one of the better coaches in the league, top four or five coaches,'' MacLellan said at a news conference Monday in Arlington, Virginia. "I think the five-year term is probably a sticking point. You have a coach that's been here four years, you do another five, that's nine years. There's not many coaches that have that lasting ability. It's a long time and it's a lot of money to be committing to a coach.''

Barry Trotz hoists the Stanley Cup after Game 5 of the Stanley Cup Final. Dave Sandford/NHLI via Getty Images

The Capitals and Trotz attempted to renegotiate an extension on better conditions for Trotz, but were unable to come to terms.

"We were struggling at the time to get over the hump,'' MacLellan said. "We couldn't get out of the second round and Barry hadn't been able to coach out of the second round yet either. I think from the organization's perspective, some changes would've had to be made if we lost in the second round again.''

Trotz, 55, and the Capitals had openly discussed getting a new contract done since the team won the Cup in Game 5 over the Vegas Golden Knights.

Best Record Last 4 Seasons In four seasons under Barry Trotz, the Capitals were 205-89-34, the best record in the league. W-L-OTL POINTS PCT Capitals 205-89-34 .677 Ducks 187-97-44 .637 Penguins 188-103-37 .630 Lightning 192-108-28 .628 >>Excluding Golden Knights --ESPN Stats & Information

Later, at the team's championship parade, Trotz talked about the team striving to win back-to-back Stanley Cups, telling the crowd, "We'll do it again." But his optimism was cautious.

"We've got lots of good things going," Trotz said. "We'll work through what we need to do. If that's what they want, then something will get done. If not, we'll deal with that."

In four seasons under Trotz, the Capitals were 205-89-34, the best record in the league. He becomes the first active coach since Mike Keenan with the New York Rangers in 1994 to not return to the team with whom he won the Stanley Cup in the previous season.

Speculation for Trotz turns to the New York Islanders, the only NHL team currently without a head coach. As for the Capitals, they've been grooming associate coach Todd Reirden for a head-coaching gig. Reirden, who has been responsible for coaching their defensemen, wasn't allowed to interview with teams last summer.

"Todd's a good candidate for it,'' MacLellan said. "We're going to start with Todd here, and we've been grooming him to be a head coach whether for us or for someone else. We'll see how the talk goes with him and then we'll make a decision based on that. If it goes well, then we'll pursue Todd, and if it doesn't, we'll open it up a little bit.''