Maualuga, 30, was entering the last season of his contract and was due $3.6 million in salary and bonuses.
"Rey has been a tough and productive player for us, and a fine teammate, and this is a difficult decision," Bengals coach Marvin Lewis said in a statement. "It's one of several we have made to transition to a younger group at linebacker as we continue to shape our 2017 roster."
Maualuga was the Bengals' second-round draft pick in 2009 and has been a longtime fixture in the middle for Cincinnati, starting 104 regular-season games there during his eight-year tenure.
However, Maualuga's play appeared to decline in 2016, and so did his playing time. He became expendable due to his age, salary and production.
He played only nine snaps in the season opener vs. the Jets, and took more than 50 percent of the defensive snaps in only four games last season. He missed two games due to injury and finished the season with 27 total tackles, the lowest number of his career.
The Bengals were clearly looking to go in a new direction at linebacker, letting Karlos Dansby leave in free agency and signing Kevin Minter to a one-year, $4.25 million deal. They have also taken a hard look at linebackers in the draft and have not dismissed the possibility of taking one early.
With Maualuga gone, Minter and Vontaze Burfict will be two of the main starting linebackers, with 2016 third-round pick Nick Vigil also in line for more playing time. Vincent Rey, who backed up Burfict while he was out on suspension last year, will also figure into the mix.
Maualuga played in 114 games with 104 starts in his eight seasons with the Bengals, compiling 584 tackles, four sacks, seven interceptions and six forced fumbles.