His agent, Jeff Sperbeck, tweeted the news late Monday morning.
- Jeff Sperbeck (@jeffsperbeck) September 8, 2014
He had two carries for no yards in the Niners' 28-17 season-opening victory Sunday at the Dallas Cowboys.
James will be subject to waivers.
He was slowed in training camp by an elbow injury and had fallen behind starter Frank Gore and Carlos Hyde on the Niners' depth chart, as well as behind rookie Bruce Ellington as the primary kick and and punt returner.
On Sunday, in the wake of an NFL Network report that Harbaugh was losing the locker room, the coach said he had an open door policy for players with issues. He said Monday James had approached him before the move was made.
"We wish LaMichael well in his career and hope for a long and healthy career for LaMichael James," Harbaugh said in his Monday news conference. "(We) appreciate his contribiutions to the 49ers and continue to wish him well."
The 5-foot-9, 195-pound James, who rushed for 5,082 yards and averaged 6.6 yards per carry in his college career at Oregon, never fit in with the 49ers' power running game.
In 15 career games with the 49ers, James rushed for 184 yards on 41 carries and caught five passes for 45 yards. He did not score a touchdown.
The 49ers are now down to just two tailbacks on the 53-man roster in Gore, who went over 10,000 career yards rushing on Sunday, and rookie Carlos Hyde, who averaged 7.1 yards per carry against the Cowboys.
Marcus Lattimore, drafted in the fourth round in 2013 despite suffering a terrible knee injury, is on the Non-football Injury list still rehabbing and is not eligible to play until after Week 6.
Harbaugh said the 49ers would sign a player and the team did -- receiver/special teams ace Kassim Osgood, who has already been cut by the Niners twice in the past two weeks.