Iverson missed the last four games and a series of contests before the NBA's All-Star break to be with his sick 4-year-old daughter.
"After discussing the situation with Allen, we have come to the conclusion that he will not return to the Sixers for the remainder of the season, as he no longer wishes to be a distraction to the organization and teammates that he loves very deeply," said Sixers President Ed Stefanski. "It has been very difficult for Allen and the team to maintain any consistency as he tries to balance his career with his personal life."
Iverson signed a one-year contract to rejoin the Sixers in December. He appeared in 25 games for Philadelphia, averaging 13.9 points a game.
He spent the first 10 seasons of his 14-year NBA career with the Sixers, who made him the first overall selection of the 1996 draft. He was voted the NBA rookie of the year in 1997 and took the league most valuable player honor in 2001, when he helped Philadelphia reach the NBA finals.
Iverson averaged 26.7 points over 914 NBA games.