Miami gave Chen an $80 million, five-year contract before the 2016 season, but he went 13-19 with a 5.10 ERA in four injury-plagued seasons. Last year Chen was demoted to the bullpen and had a 6.59 ERA in 45 games.
President of baseball operations Michael Hill said the Marlins parted with Chen to create more room for young talent on their roster.
"This decision was not about money," Hill said Wednesday. "It was about building the best and deepest 40-man roster to allow us to compete in 2020 and beyond."
Chen will receive $5 million during the 2020 season and $5 million on Nov. 30, 2020. The $12 million remaining is part of deferred money payable through June 30, 2021.