Senior executive John Herrera told The Associated Press about the move and said that "we wish him well."
The decision came less than two weeks after Oakland acquired Jason Campbell from Washington to take over at quarterback and signifies that owner Al Davis finally lost patience with the immensely talented but unproductive player he drafted first overall in 2007 against the wishes of former coach Lane Kiffin.
Russell will now likely be considered one of the biggest draft busts in NFL history, joining Ryan Leaf, Ki-Jana Carter, Akili Smith and others on that list. He will have been paid more than $39 million by the Raiders, while producing only seven wins as a starter.
Russell showed up at last week's minicamp, saying he would keep coming to work until told otherwise. He looked decent in the first of five practices last weekend but got less work as the weekend went on and the decision to cut ties was finally made.
The Raiders paid Russell more than $36 million through last season. They still owe him $3 million more but saved $6.45 million by not having him on the roster in 2010.
"Sometimes certain expectations aren't met, and certainly there's an opportunity for a young athlete to continue to get better," Les Miles, Russell's coach at LSU, told the New Orleans Times-Picayune for Friday's editions. "It's only my hope the opportunity for JaMarcus to land with a team that will invest in him and give him the opportunity to continue to develop.
"I don't know the situation at Oakland. I would have expected him to have success early and late. Sometimes that doesn't work. Sometimes a guy needs more time to develop."
Since the start of the common draft in 1967, only one other No. 1 pick was released this quickly in his NFL career. Indianapolis cut 1992 top pick Steve Emtman after three seasons but that was more because of injuries than production.
Emtman played three more seasons for Miami and Washington. It remains to be seen whether any team will give Russell another shot.
Davis believed Russell could turn the fortunes of his struggling franchise when he drafted him. He stood by him during his struggles, revealing when he fired Kiffin in 2008 that the coach did not want him.
"He is a great player. Get over it and coach this team on the field," Davis read from a letter he sent Kiffin before the firing. "That is what you were hired to do. We can win with this team."
But the Raiders were unable to win with Russell at the helm and Davis allowed Cable to bench Russell midway through last season. The move was popular in the locker room and gave the team a spark on the field as Bruce Gradkowski led comeback wins over Cincinnati and Pittsburgh.
Davis was not satisfied with Gradkowski as his standard bearer and the Raiders were linked to possible offseason deals for Donovan McNabb and Ben Roethlisberger. While the Raiders downplayed how serious those talks ever got, they did make the move for another quarterback when they acquired Campbell from Washington for a 2012 fourth-round draft pick.
The team showed confidence in Campbell by extending his contract through 2011, giving him a $4.5 million deal that season on top of the $3.14 million he is owed this season.
Russell won only seven of his 25 starts as the Raiders extended an NFL-worst streak to seven straight seasons with at least 11 losses. He completed just 52.1 percent of his passes in his career with 18 touchdowns, 23 interceptions, 15 lost fumbles and a passer rating of 65.2.
That means Russell has been paid more than $5 million per win, more than $2 million per touchdown pass and more than $100,000 per completion.
While Russell's numbers are superior to Leaf's, he was paid considerably more money to do it and was picked first instead of second. Leaf's rookie contract guaranteed him only $11.25 million.
Russell's tenure in Oakland got off to a rough start and never got much better. He held out his first season, not signing a contract until after the first game of the regular season. That made his rookie season almost a complete loss, as he started only one game.
He showed some signs of progress in his second season, especially in winning the final two games of the year against Houston and Tampa Bay. But the problems of work ethic and his weight never disappeared and his third season was an utter disaster.
He was fined for being overweight when he showed up at training camp. He then put together one of the worst seasons in recent memory for an NFL quarterback. He completed 48.8 percent of his passes, with three touchdowns, 11 interceptions and a 50.0 passer rating that was the lowest since Leaf, Bobby Hoying and Craig Whelihan all finished below 50 in 1998.
Information from The Associated Press was used in this report.