"We wanted to inform all three players ahead of the start of the free agency period so they could begin making their plans," Bills general manager Buddy Nix said. "We just felt that was the right thing to do. All three have represented our organization with class and we thank them for their dedication and hard work."
Owens, who will turn 37 in December, caught 55 passes for 829 yards and five touchdowns in his only season in Buffalo. He also ran for a touchdown.
"I would like to thank the great fans in Buffalo, Ralph Wilson & the Bills organization for all their supports this past season," Owens said on Twitter.
The six-time Pro Bowl receiver caught his 1,000th pass in Week 16 at Atlanta to become the sixth player in league history to reach the milestone. Owens then moved into third place on the career list with 14,951 yards receiving in a 30-7 win over Indianapolis in Week 17.
Denney and Reed were both second-round picks in the 2002 draft.
Denney made 318 tackles and 23½ sacks in his career, while Reed is fifth on the club's career receiving list with 311 catches for 3,575 yards.