The team announced the move Friday morning on Twitter.
The 30-year-old Willis signed a deal with the Phillies this offseason and was competing for a bullpen spot this spring.
A two-time All-Star with the Marlins, Willis has pitched for four teams in nine seasons, all of them as a starter. The Phillies signed him to a nonguaranteed contract in December.
According to the Philadelphia Inquirer he will receive $139,000 in severance pay.
In three appearances this spring, Willis allowed five earned runs on five hits and four walks in 2 2/3 innings. He made his last appearance Thursday against the Atlanta Braves.
The Phillies also reassigned catcher Steven Lerud to minor league camp Friday morning.