Phifer, 37, is the latest starter cut by the Super Bowl champions this off-season for salary cap purposes. Friday, they released cornerback Ty Law.
Phifer, a 14-year veteran, earned three Super Bowl rings in four years with the Patriots.
Last season, while sharing time at inside linebacker with Ted Johnson, Phifer, recorded 51 tackles and one interception and had two passes defensed.
The team saved about $1.5 million against the 2005 salary cap with the move.
Phifer apparently suspected he would be released this off-season.
"I still have one more game to play, which is the most important," he said three days before the Patriots' 24-21 victory over Philadelphia in Super Bowl XXXIX.
In his career, Phifer has 1,297 tackles, 29 sacks and 11 interceptions while also playing for St. Louis and the New York Jets.