Law's agent, Carl Poston, told the Newark Star-Ledger on Tuesday that his client and the Jets have agreed to the divorce.
"We've mutually agreed to part ways," Poston told The Star-Ledger. "There's no ill feelings. Ty had a great year. He enjoyed it [in New York]. He held up his end of the bargain. Unfortunately, the Jets had some injury problems that derailed them."
Law, 32, had 62 tackles and a career-high 10 interceptions in 2005, his first season with the Jets after 10 years playing in New England. Law was selected to his fifth Pro Bowl.
The Jets hoped that the hiring of Eric Mangini as head coach might persuade Law to stay. Mangini coached Law when both were with the Patriots.
Law will become an unrestricted free agent after the Jets formally release him.