The Saints on Monday asked Murray to take a reduction in pay, and he refused, sources told ESPN's Adam Schefter.
Murray, 31, was due to make $3.15 million in salary and bonuses this season. That, combined with the emergence of undrafted second-year running back Tony Jones Jr., led to the Saints' decision.
Murray had been an excellent running mate for Saints star Alvin Kamara over the past two seasons, after Murray signed a four-year, $14.4 million contract in 2019. Murray tallied 1,293 rushing yards, 411 receiving yards and 11 touchdowns over those two seasons.
Murray was especially valuable when Kamara missed two games with injuries in 2019, gaining at least 150 yards from scrimmage with two touchdowns in each game as an every-down back.
The 6-foot-3, 230-pound Murray began his career with the Raiders and Vikings, making the Pro Bowl in 2015. He has 4,991 rushing yards, 1,294 receiving yards and 45 touchdowns in his seven-year career.
Murray initially survived the Saints' cuts this offseason, when the team had to trim more than $110 million to fit under the NFL's reduced salary-cap number. But he appeared to fall behind Jones in the pecking order as training camp and the preseason went on. The Saints also signed veteran running back Devonta Freeman during camp, though he didn't make the 53-man roster.
Jones (5-foot-11, 225 pounds) appeared in just one game for the Saints last season as an undrafted rookie out of Notre Dame, with three carries for 13 yards. But he led the team with 106 rushing yards and a TD in two preseason games, to go along with six catches for 42 yards.
New Orleans officially announced the signing of veteran cornerback Desmond Trufant in a corresponding move on Tuesday.