Green was hailed as the solution to Houston's rushing woes when he was signed but finished each of his two seasons with the Texans on the injured reserve. He leaves after rushing for 554 yards and missing 18 games with various injuries.
The 31-year-old four-time Pro Bowler started Houston's season opener but missed the next game with an injury. Rookie Steve Slaton filled in and when Green was healthy coach Gary Kubiak decided to stick with Slaton.
Slaton responded by rushing for a team-record 1,282 yards.
The move could signal the end of Green's 11-year career that began in Seattle and peaked in his seven seasons with the Green Bay Packers. He rushed for more than 1,100 yards in each of his first five seasons with the Packers before missing 11 games with an injury in 2005. Green rebounded to rush for 1,059 yards in 2006 before joining the Texans.
The 30-year-old Greenwood, who recorded more than 100 tackles in each of the previous four seasons, saw his production and playing time decrease this season as Houston relied on its younger linebackers.
He started 10 games and finished with 45 tackles.