Reed, who earlier had lost his starting job, was released by the Texans after a year marked by ineffectiveness, injuries and off-season surgery.
The nine-time Pro Bowl selection came to Houston after spending his entire 11-year career with Baltimore. He led the league in interceptions three times, compiling 61 pick-offs over 160 career games, including seven for touchdowns.
Reed played a key role for the Ravens in last year's Super Bowl Championship run, but this season he has managed just 16 combined tackles in seven games.
The struggling Texans (2-7) also announced star running back Arian Foster had been placed on injured reserve due to a back injury.
He finishes the 2013 season with 542 yards and one touchdown on 121 carries.