The Cowboys also announced that they've released kicker David Buehler.
Newman was scheduled to count $8.016 million against the salary cap in 2012 and by cutting him the Cowboys have created either $4 million or $6 million in space to sign free agents depending on how they designate the roster move.
The Cowboys knocked Scandrick's base salary down from $7.1 million to $1.2 million, with the $5.9 million difference was turned into a signing bonus, the sources said. Meanwhile, Free's salary was lowered from $6 million to $1.2 million with the difference turned into a bonus that will spread the cap hit over the length of the contract, according to sources.
Scandrick and Free were set to count $7.7 million and $8.06 million against the cap.
Owner and general manager Jerry Jones noted a drop in play late last season for Newman, the team's first-round pick in 2003, despite the fact that he tied for the team lead with four interceptions and 10 pass breakups.
Newman, who turns 34 in September, recorded 32 interceptions with the Cowboys, tying him for seventh in team history with Lee Roy Jordan. He played in two Pro Bowls (2007, '09) and started 131 of 133 career games.
Newman missed the first two games of the 2011 season because of a groin injury. In 14 starts, he was credited with 57 tackles, four interceptions and 10 pass deflections, but teams late in the season, especially the New York Giants, directed their passing attack at him.
While the move creates salary-cap room, it also creates a hole on the roster. The Cowboys signed Scandrick to a five-year extension before last season and have Mike Jenkins under contract through 2012 but do not have another corner signed. Frank Walker and Alan Ball are unrestricted free agents.
A league source told ESPN NFL Insider Adam Schefter that Carr will visit the Cowboys on Tuesday night.
Having lost his job last year to Dan Bailey and carrying a salary-cap figure of $1.63 million in 2012, the Cowboys also decided to part ways with Buehler.
Buehler played in only four games in 2011 because of a groin injury that eventually required surgery. He lost the field goal kicking job to Bailey in training camp and injuries prevented him from holding on to the kickoff specialist position.
His leg strength was an asset on kickoffs but as the kicker in 2010 he 24 of 32 field goal tries (75 percent) and had some big misses early in the season and missed a point-after attempt at Arizona that cost the Cowboys a game.
Because Buehler, a fifth-round pick in 2009, hit an escalator in his contract in 2010 for his 114 points, his base salary jumped to $1.26 million for 2012.
Todd Archer and Calvin Watkins cover the Cowboys for ESPNDallas.com.