Carolina announced the move on Wednesday afternoon. Stewart, 30, has spent his entire 10-year NFL career with the franchise. He ran for 680 yards and six touchdowns on 198 carries in 2017. Stewart also had one receiving score in 15 appearances and started 10 games this season.
The move comes after the Panthers drafted running backs Christian McCaffrey and Curtis Samuel in the first and second rounds, respectively, in the 2017 NFL Draft. Carolina also used a fifth round pick on running back Cameron Artis-Payne in the 2015 NFL Draft.
Stewart was a first round pick in the 2008 NFL Draft out of Oregon.
"Jonathan played the game the way you want. He brought an element of toughness as a runner that set the tempo for our team," head coach Ron Rivera said of Stewart in a release from the Panthers.
"He is a great pro, and I appreciate who he is as a young man and thank him for the contribution he made."
Stewart is the franchise's all-time leading rusher, with 7.318 yards. He also ranks No. 1 with 1,699 rushing attempts. Stewart's 58 career touchdowns are No. 2 in Panthers history. He made his only Pro Bowl in 2015 after rushing for 989 yards and six scores on 242 carries. Stewart also holds the Panthers records for postseason rushing yards, rushing attempts and rushing touchdowns.
The Panthers led the NFL in rushing during Stewart's 10-year tenure.
Carolina saved $3.7 million against the salary cap by cutting Stewart.