Ulis, 22, averaged 7.8 points and 4.4 assists in 2017-18.
A second-round draft pick out of Kentucky, where he played with Suns guard Devin Booker, Ulis was slated to make $1.5 million next season. That would have become guaranteed on Sunday if the team did not release Ulis.
Suns general manager Ryan McDonough said Friday that the team was looking to acquire a point guard in free agency. Phoenix also drafted French point guard Elie Okobo with the 31st pick in the NBA draft.