Murray, who turned 30 last month, had two years and $13 million remaining on his contract. However, none of that money was guaranteed.
As a result, the Titans will have an additional $6.25 million in cap space at their disposal when free agency begins.
"I want to thank DeMarco for his contributions as a Titan, not only for what he did on the field but also in the locker room and in the community," Titans general manager Jon Robinson said in a statement. "He was a pro in every facet and we wish him and his family the best moving forward."
The Titans acquired Murray in a 2016 trade with the Philadelphia Eagles, and he lived up to expectations during his first year in the Music City.
Appearing in all 16 games, Murray racked up 1,664 yards and 12 touchdowns from scrimmage while posting a respectable 4.4 yards per carry.
Last season, Murray wasn't quite as prolific.
Although he played through various injuries and missed just one game, Murray mustered a career-low 3.6 yards a carry. All told, he rushed for 659 yards and six touchdowns.
With Murray struggling to rip off chunk gains, the Titans allotted more carries for 2016 second-round pick Derrick Henry.
The 2015 Heisman Trophy winner finished his second NFL season with 176 carries for 744 yards and five touchdowns. He also came alive in the postseason with 23 carries for 156 yards and a score in the Titans' 22-21 wild-card win over the Kansas City Chiefs.
"He is a bigger back as we all know, and has good speed in the open field," Robinson said at the NFL Scouting Combine, according to Jim Wyatt of the team's official website. "He is a guy who can get downhill, and he has the ability to pick and slide and get up in a crease. We are looking forward to him getting back, and working with him in the new offense."
With Henry now penciled in as the Titans' new featured option, the front office will have to fortify the depth chart and identify a quality change-of-pace option considering David Fluellen and Khalfani Muhammad are the only other running backs under contract.