The franchise announced the news Monday.
"This is a smart business decision for the team for several reasons," said Jaguars Executive Vice President of Football Operations Tom Coughlin. "It makes sense for us going forward and it's good for Blake and for the Jaguars."
Bortles, 25, experienced some regression last season following a breakout 2015 campaign. The No. 3 overall pick in the 2014 NFL Draft threw 35 touchdowns two seasons ago. In 2016, he threw 23 scores and passed for 500 fewer yards than his previous season. Bortles owns an 11-34 record as the team's starting quarterback.
Jaguars general manager Dave Caldwell was uncertain about picking up the $18 million option last month.
"We're still discussing that," Caldwell told the Florida Times-Union in April. "There are a lot of things that go into it."
Wednesday was the deadline for Bortles' fifth-year club option. He'll make $3.2 million in 2017.
Instead of using its first round pick on a passing prospect like Mitchell Trubisky, Deshaun Watson or Patrick Mahomes, the Jaguars selected LSU workhorse running back Leonard Fournette at No. 4 overall Thursday in the 2017 NFL Draft.
The pick likely means that Fournette will be used in a punisher-like role where he will be featured to wear down opposing defenses and put Bortles in a position to manage games. Another hint at the trend was when the Jaguars traded away tight end Julius Thomas this offseason to the Miami Dolphins.
"Yeah, I think you guys know how we feel about Blake. We've got a lot of new eyes on Blake from a new coaching staff and have gotten good feedback from those guys, guys that haven't been around who don't have anything vested in the kid," Caldwell said Friday. "We still think he's what, 25 years old, and we still think he's got a lot of room to improve."
The Jaguars have said that it is trying to "build" Bortles' foundation, but hadn't done much in the personnel department to follow through heading into the draft. But it added Alabama behemoth offensive tackle Cam Robinson Friday in the second round. The Jaguars traded with the Seattle Seahawks to move up to the No. 34 overall selection to nab Robinson, who stands at 6-foot, 6-inches and weighs 322 pounds.
Robinson won the 2016 Outland Trophy, given to the nation's top offensive lineman. He was a two-time winner of the Jacobs Trophy and should give Bortles more time to scan his downfield progressions.
"It's going to be really cool" blocking for Fournette, Robinson told reporters after the draft. "I've known Leonard for a while. We came out of high school in the same class, both from Louisiana. He was the No. 1 player in the state. I was the No. 2 player in the state. It's going to be fun."
Jacksonville added left tackle Branden Albert in a February trade with the Dolphins. The two-time Pro Bowl selection hasn't played more than 14 games in a season since 2011. Albert has missed 17 games in the last four seasons.
Caldwell says Robinson will play left tackle, competing with Albert for the starting job. He also said it's possible the rookie could move inside to guard.
"We told him [in January] we wanted him to make sure his arm was ready to go because there will be an increase in reps, which will help him. I've been with Drew [Brees] in New Orleans and obviously he's a Hall of Fame-type quarterback and that's the way we approached it with him and with the team. You start with the foundation and you look to see how fast they can work through the foundation."
Marrone said that he "didn't know" if the draft helped to build around Bortles. The fourth-year quarterback has been sacked 140 times in 46 career games.
"I don't know," Marrone told reporters Saturday. "I think that's a term a lot of people use in saying 'building around.' 'Hey, let's get this piece and then build around the quarterback.' I don't think strategically we went into this process thinking that, this draft process or free agency process. We went into it more saying where do we need to bring this team up? Obviously, the more good players, the more good players the better of a chance you have, so I don't think that conversation took place of building around him."