Williams will become an unrestricted free agent when the NFL's new league year begins March 16.
Williams signed a four-year contract extension with the Cowboys in 2017. The sixth-year wideout was scheduled to earn a base salary of $3.5 million next season and $4 million in 2020.
The 29-year-old receiver played in just three contests last season. The Cowboys placed Williams on injured reserve Oct. 6 with a foot injury.
While Williams was on injured reserve, the NFL suspended him three games for violating the league's substance abuse policy after an incident in May 2018.
Williams played six seasons with Dallas after the franchise selected him in the third round of the 2013 NFL Draft. He appeared in 83 games (68 starts) and recorded 232 catches for 3,377 yards and 20 touchdowns.