Per the Charlotte Observer, Shepard refused to accept a pay cut from the team after signing a three-year, $10 million deal last offseason.
"It was fun while it lasted thanks for the OPPORTUNITY," the 28-year-old Shepard wrote on Instagram.
Shepard had just 17 receptions for 202 yards and a touchdown in 2017.
Also on Monday, the Panthers signed wide receiver Bug Howard, center Kyle Friend, guard Quinterrius Eatmon and defensive end Karter Schult. Carolina also waived cornerback Zack Sanchez with an injury designation.
Howard totaled 2,048 receiving yards and 18 touchdowns in four seasons at North Carolina.
Eatmon has played with a number of Canadian Football League teams, most recently for the Hamilton Tiger-Cats during the 2017 season.
Schult signed with the Cleveland Browns in May 2017 before being waived at the end of the preseason.