Melvin made the announcement on SiriusXM's MLB Network Radio.
"Unfortunately, we had to let him go," Melvin said. "I'll tell you what, this guy, maybe he didn't put up big numbers, but this is a terrific teammate."
The A's acquired Morales from the Toronto Blue Jays before the season. With first baseman Matt Olson returning last week after missing 34 games with a hand injury and Morales struggling at the plate, Morales' spot on the roster had been in question.
Morales, 35, was hitting just .204 with one home run and seven RBIs in 108 at-bats. He had made 23 starts at first base this season in Olson's absence.
He had hit at least 20 home runs in each of the previous four seasons and has 212 homers in his 13-year career.
The A's reinstated first baseman/outfielder Mark Canha from the injured list in a corresponding move Monday. Canha had been sidelined with a sprained right wrist.