Foles had requested his release, a source told ESPN.
The Rams tried to trade Foles but were unsuccessful, a source said. Foles will now become an unrestricted free agent.
Foles agreed to a reduction in the guaranteed money the Rams owed him in 2016 in exchange for being released and having the opportunity to sign with the team of his choice, a source told ESPN.
"We have been in contact with Nick and his representation throughout the offseason and we feel that this is the best decision for all parties involved," Rams coach Jeff Fisher said in a statement. "We appreciate the contributions that Nick has made to our organization in his time as a Ram and wish him the best of luck in his future endeavors."
Foles skipped the Rams' offseason workouts, unhappy that the team used its No. 1 overall pick to select quarterback Jared Goff, sources had told ESPN.
He started the first nine games but was benched for Case Keenum after throwing only seven touchdowns with six interceptions and five fumbles during a 4-5 start.
ESPN's Adam Schefter, Dan Graziano and Ed Werder contributed to this report.