The team announced the move Thursday, nearly eight months after owner Bud Adams said the team would trade or release Young.
Young is 30-18 in five seasons, including a playoff loss. He's battled questions over his work ethic, leadership and injuries.
With the new labor deal, the Titans had to move quickly to avoid paying Young a $4.25 million roster bonus that had previously been due on the 10th day of a new league year. He also was scheduled for $8.5 million in salary this season, making him too pricey to trade to another team.
The Titans announced in January they would either release the 28-year-old Young or try to trade him because he's not in their plans for 2011. The team selected quarterback Jake Locker with the eighth overall pick in April's draft and reached an agreement with former Seattle Seahawks quarterback Matt Hasselbeck Wednesday, according to a league source.
Young already was eyeing the Philadelphia Eagles as a potential destination, a source told ESPN's NFL Insider Adam Schefter. Some around the league believe the Eagles are considered the "favorite" to land Young, who would back up Michael Vick.
Young is expected to fly to Philadelphia as early as Friday night and sign with the Eagles this weekend, a source told Schefter. Veterans with four or more years of service like Young are not subject to waivers.
One person who knows Young said he's equally intrigued with the idea of learning from Vick, Eagles coach Andy Reid and offensive coordinator Marty Mornhinweg, who have done a first-rate job of training quarterbacks.
In Tennessee, Young cursed at former coach Jeff Fisher and blew out of the locker room Nov. 21 last season. The Titans placed him on injured reserve two days later, and Young had surgery to repair a torn tendon in his right thumb.
Young, selected third overall in the 2006 draft, came in as the successor to Steve McNair. He started off strong, being selected The Associated Press NFL Offensive Rookie of the Year in 2006, and he helped the Titans go 10-6 and a wild-card playoff spot in 2007.
But he was injured in the 2008 opener, and Fisher wound up calling police when Young's mother worried about him speeding off a day later from his home.
Veteran quarterback Kerry Collins, who retired earlier this month, was a teammate of Young's since 2006 and said he saw the troubled passer improve in 2010.
"Some guys go through things early in their career. I certainly did," said Collins, who struggled with alcohol in his early NFL years. "You just hope that guys figure it out, and you know I think the question out there is whether he has," Collins said.
"I saw signs of him figuring it out a little bit. Maybe there's still hope."
Young was one of six players the Titans waived on the first day teams were allowed to release players after the NFL's 4½-month lockout ended. Tennessee also released defensive tackle Tony Brown, running back Dominique Lindsay, defensive end Marcus Howard, defensive end Kareem Brown and offensive lineman Jeff Hansen.
Tony Brown signed a three-year contract extension worth $17 million before last season but has been hampered by injuries to his right knee. He spent five seasons with the Titans, starting the last four.
"As for Tony, his body just hasn't allowed him to play like he has in the past despite his best efforts," Reinfeldt said. "(Young and Tony Brown) have been productive for us, and we appreciate their contributions to our team through the years."
Information from ESPN.com senior NFL writer John Clayton, NFL Insider Adam Schefter and The Associated Press was used in this report.