The Roosters released a statement late on Thursday afternoon saying Carney had sought a release from the final year of his deal.
“Following a request from Todd Carney and his manager David Riolo, the Sydney Roosters have agreed today to release Todd from the final year of his contract with the club,” the statement read.
“This outcome has been mutually agreed and we believe it is the best result for all parties.
“We wish Todd well in his future endeavours.”
Carney had been sanctioned by the club three times in 2011 for alcohol-related off-field incidents.