The 29-year old rusher spent the last seven years in Washington D.C., but struggled with injuries over the last two seasons, appearing in just 13 of the team's 32 games.
Portis reached the Pro Bowl twice, in 2003 (with Denver) and 2008 after amassing 1,487 yards and nine touchdowns on 342 carries.
But in 2009 and 2010, the fan-favorite Portis was limited to 178 carries for 721 yards and three touchdowns.
"It was kind of a mutual decision. They could have sat and held on and played around. They gave me an opportunity to further my career and go somewhere where I can help," Portis said.
Portis' fate was all-but-sealed when he went down with a groin injury in Week 4. Backup Ryan Torain, who entered with 15 career carries, took the opportunity to run for 742 yards and four touchdowns on 164 carries. Torain, with his $480,000 contract, showed he had fewer miles on his odometer than Portis, who carried an $8.25 million paycheck next year.
Portis leaves the team with as the Redskins' second all-time leading rusher, just 600-some yards behind Hall of Famer John Riggins.
Team owner Daniel Snyder wished Portis the best in a statement: "We have been through a lot both on and off of the field and we would like to wish him and his family the very best. He will always be a Redskin and go down as one of the franchise's all-time greats."