The Texans released Foster, the franchise's career rushing leader. He has missed 23 games because of injuries the past three seasons.
Houston also released tight end Garrett Graham and safety Rahim Moore, giving the Texans approximately $40 million in salary cap space.
Foster rushed for 163 yards and one touchdown in four games last season.
"There are not many players I respect more than Arian Foster," Texans executive vice president of football operations and general manager Rick Smith said. "He maximized his opportunity as an undrafted college free agent and worked to become the most productive back in franchise history, and one of the most complete backs in the NFL during his tenure with the Texans.
"Arian has contributed much, and meant a great deal to the success of the franchise over the past seven seasons and we wish him only the best as he continues his playing career."
Head coach Bill O'Brien was hesitant and noncommittal when asked at the 2016 NFL Scouting Combine whether Foster would return. Smith said then that the move would not be made based solely on Foster's high cap number.
Foster, 29, is recovering from a torn Achilles tendon suffered in October and he underwent groin surgery in August 2015.
Foster was due a $6.5 million non-guaranteed base salary in the final year of a five-year, $43.5 million contract. Foster also has a $500,000 roster bonus to be paid $31,250 for every game he is active. He has an $8.925 million salary-cap figure.
Smith had predicted Foster would bounce back next season, but that comeback won't be with the Texans. Foster has been cleared to jog and is hoping to play next season, which he's expressed recently to the Texans. He has 6,472 career yards and 54 touchdowns.
Moore, who signed with the Texans in 2015, had 16 tackles, two passes defensed and one interception in seven games last season.