Wade, who was scheduled to make $16.1 million next season, announced his decision through a representative. He will automatically become a free agent Wednesday.
The Heat and Wade were at a contractual crossroads as the 33-year-old veteran faced a midnight Monday deadline on whether to opt into the final year on his contract.
Wade is believed to be seeking a deal that would average at least $16 million over the next three seasons. He has left about $27 million on the table during his career and wants those sacrifices rewarded in his next contract.
He said after the season that he wants to stay in Miami and was photographed wearing a Heat cap in recent days at his fantasy camp. But it's also clear that he wants to still be paid like an elite player, which could force the Heat into making a tough decision.
The Heat had preferred for Wade to opt in for 2015-16 and then work with the team on a new contract after next season that would give the Heat salary-cap flexibility going into the 2016 free-agency period, when Anthony Davis and Kevin Durant are likely to highlight a deep group of available stars on the market.
Heat president Pat Riley wants no part of seeing Wade bolt for another team, especially after enduring LeBron James' brutal and abrupt departure in free agency last summer to return to the Cleveland Cavaliers. But Riley is adamant about also maintaining salary-cap flexibility moving forward.
Wade has spent his entire 12-year career with the Heat. His age and recent injury history -- missing 48 games the past two seasons -- were major areas of concern while assessing his long-term value to the team at this stage of his career.
ESPN.com's Michael Wallace and The Associated Press contributed to this report.