The designation could be an indication that the team plans to seek parts, if not all, of the signing bonus Fanene received when he signed with the team March 20. Fanene's total signing bonus was $3.85 million, but according to a source, $1.35 million of that was deferred to March 31, 2013.
Fanene, 30, was one of the team's big free-agent signings this offseason. He had missed the team's final 13 practices of training camp with a knee injury and was potentially set for arthroscopic surgery later this week, a source told ESPN.com's John Clayton.
The Boston Globe, citing a league source, reported Wednesday that Fanene was dealing with an inflammatory ailment, possibly arthritis.
Fanene passed a physical with the Patriots before signing with them, and he took part in the first five practices of training camp.
The "failure to disclose physical condition" designation was instituted this year by the NFL. Fanene and undrafted free-agent linebacker Larry Lumpkin (formerly of the Indianapolis Colts) are the only two players to be released under the designation, according to a source.
Both Fanene and Lumpkin were released Tuesday.
"It just didn't work out," coach Bill Belichick said Wednesday before a joint practice with the Tampa Bay Buccaneers, repeating remarks on Fanene from Tuesday. "Nothing to add other than that, it just didn't work out."
Field Yates is a regular contributor to ESPNBoston.com.