Urlacher, 34, originally sought a two-year deal for about $11.5 million. The Bears came back with one year for $2 million. The twain never met.
"It wasn't even an offer, it was an ultimatum," Urlacher told the Chicago Tribune. "I feel like I'm a decent football player still. It was insulting, somewhat of a slap in the face.
"They came back with the offer and said, 'This is what it is, take it or leave it. It was, 'If you want to play for the Bears, you'll play for this. If not, then you're not playing for the Bears.'"
The player, who said he wanted to stay with the Bears, put his bottom line in the $3 million to $3.5 million range. Urlacher said he now intends to latch on with another team and has been in contact with several.
Despite his comments, Urlacher said "there are no hard feelings."
"I had a great run here. I'm going to miss the [heck] out of my teammates," he said.
Urlacher, the Bears' all-time leading tackler, had starred for Chicago since being drafted in the first round out of the University of New Mexico in 2000 and going on to win the NFL's Rookie of the Year Award.
"Brian has been an elite player in our league for over a decade," Bears General Manager Phil Emery said. "He showed great leadership and helped develop a winning culture over his time with the Bears. We appreciate all he has given our team, on and off the field."
Urlacher has racked up 1,779 tackles, 41 1/2 sacks, and 22 interceptions during his 13-year career.
He was limited to 12 games last season due to injuries -- the first time he failed to play every game in a season for Chicago.