McAllister, 30, who became expendable with the rise of running backs Reggie Bush and Pierre Thomas, started six games last season rushing for 418 yards and five touchdowns. McAllister, who appeared in 13 games in 2008, also had 18 receptions for 128 yards and a touchdown.
Drafted in 2000 out of the University of Mississippi, McAllister's 6,096 career yards on 1,429 attempts is a New Orleans' team record. He scored 49 touchdowns and had 234 receptions and 27 100-yard rushing games.
McAllister, who battled back from injury after tearing the anterior cruciate ligament in his right knee in 2005 and his left knee in 2007, had four 1,000-yard plus seasons with the Saints, including a 1,641-yard season in 2003 with eight touchdowns.
"Decisions like this are always very difficult ones to make," said Saints General Manager Mickey Loomis. "He truly ranks as one of the greatest players in our club's history …"