Veteran tight end Robert Royal, who had two years left on his contract, also will be released, according to his agent, Rick Smith.
The two moves would free up a total of about $8 million in salary cap space for a team that has missed the playoffs for nine consecutive years, the worst streak in franchise history.
Dockery was one of the key prizes in the free-agent class of 2007. His agent, Todd France, was able to get him a Steve Hutchinson-type package to leave the Washington Redskins for Buffalo. His seven-year, $49 million deal was the highest salary for a guard at the time.
During the first two years of the contract, Dockery was guaranteed $18.5 million. France said he was informed by the Bills that they wanted to go in a different direction, and that Dockery didn't fit the offensive line scheme under assistant Sean Kugler, who took over last year after Jim McNally retired.
Dockery, who will go on the waiver wire at 4 p.m. ET, could go to the top of the list of guards in free agency.
The 28-year-old Dockery, who played in college at Texas, entered the league as the third-round pick with the Redskins and has 77 career starts.
Listed at 6-foot-6 and 335 pounds, he started all 32 games in Buffalo and was part of one of the NFL's largest offensive lines in terms of height and weight. But the line struggled last season, allowing 38 sacks, 12 more than the previous team, and the offense finished 25th in the NFL in total yards.
In another move, the Bills have re-signed starting fullback Corey McIntyre to a two-year extension.
John Clayton is a senior NFL writer for ESPN.com. Information from ESPN.com's Tim Graham and The Associated Press was used in this report.