Foster, who has a bulging disk, is scheduled to have back surgery Thursday in Los Angeles The procedure will be performed by Dr. Robert Watkins, a source has told ESPN.com's Tania Ganguli.
The 35-year-old Reed, a nine-time Pro Bowler who was the Texans' prize acquisition of the offseason, said Sunday night after Houston's loss to the Arizona Cardinals that the Texans were "outplayed and outcoached" in certain situations. Reed played only 12 snaps against the Cardinals.
"Eventually they're going to figure out what you're doing if you're doing the same old things," Reed said.
He also acknowledged a drop off in his play.
"I'm held to a high standard because of what I've done in the past, but that was the past," Reed said. "I'm a totally different player now. Even when I did go out there, the ball didn't come my way."
Asked Monday about Reed's criticism, interim coach Wade Phillips said: "Everyone has an opinion. I'll keep mine in house."
Reed seemed to acknowledge his release in a tweet earlier Tuesday before the team's official announcement.
Thanks to the Texans! And the City of Htown!
— Ed Reed (@TwentyER) November 12, 2013
After signing a three-year, $15 million contract (he collected $5.5 million) with the Texans in March, Reed had surgery to repair a torn labrum. He missed all of the Texans' offseason workouts and spent training camp on the physically unable to perform list.
He made his season debut in Week 3 against his former team, the Baltimore Ravens, in a 30-9 loss. He had just 16 tackles in seven games and recently lost his starting job.
Reed had been demoted to being used in just dime situations against the Indianapolis Colts two weeks ago. He said it was the first time since his sophomore year in college that he was healthy for a game he did not start. He said he didn't handle the news especially well but was willing to do what was best for the team.
He spent his first 11 seasons with Baltimore and was the NFL's Defensive Player of the Year in 2004. After winning the Super Bowl with the Ravens last season, he signed with the Texans, who were viewed in the offseason as possible title contenders but have stumbled to a 2-7 record.
The move could mean the end of the career of a player many believe is the best to ever play his position. He led the league in interceptions in 2004 and again in 2008 and 2010. He's made the Pro Bowl in each of the last seven seasons and was a five-time All-Pro.
A first-round draft pick in 2002, his 61 career interceptions were most among active players and he has 109 passes defended, 524 tackles and 11 forced fumbles in 167 games.
The Dallas Cowboys had been discussing whether to pursue Reed, a league source told ESPN NFL Insider Ed Werder but a Cowboys front-office source later told ESPNDallas.com's Calvin Watkins that the team has decided against it.
The Cowboys worked out veteran Michael Huff, the seventh overall pick in the 2006 draft, who had been cut by the Ravens earlier this season after being added to help replace Reed in Baltimore. Huff is unlikely to be signed by Dallas, however, sources told ESPN.com's Todd Archer.
The Cowboys have been playing Barry Church and undrafted Jeff Heath, who was the closest defender on three touchdowns in Dallas' 49-17 loss Sunday night against the New Orleans Saints, a game in which the Cowboys allowed an NFL-record 40 first downs and 625 yards -- the second time they've allowed at least 620 yards in three weeks.
Foster's injury will delay his stock offering.
Fantex Brokerage Services, which recently announced its intention to allow fans to invest in stock related to the performance of an athlete's brand, had planned its first initial public offering to be for Foster. But on Tuesday, the company said it decided to postpone the offering on Foster.
"After consideration, we have made the decision to postpone the offering for Fantex Arian Foster," said Buck French, CEO, Fantex, Inc. "We feel this is a prudent course of action under the current circumstances. We continue to support Arian and his brand, and we wish him well in his recovery. We will continue to work with him through his recovery and intend to continue with this offering at an appropriate time in the future based on an assessment of these events."
ESPN.com Ravens reporter Jamison Hensley and information from The Associated Press contributed to this report.