Anelka was recently given a five-match suspension by the Football Association for his controversial 'quenelle' gesture.
And on Friday afternoon the Frenchman announced that he was told by the club that he could return to the West Brom 'group' only under certain conditions which he could not accept - and he has therefore released himself from his contract.
Anelka sent three tweets, in French. They translate as: "Following talks between the club and me, propositions were made to me in order to reintegrate me into the squad under certain conditions that I cannot accept.
"Wishing to retain my integrity, I have therefore taken the decision to free myself and put an end to the contract linking me with West Bromwich Albion to 2014, with immediate effect."
The 'quenelle' gesture is considered anti-Semitic, particularly in France.
Anelka insisted he is not racist, and that the gesture is anti-Establishment, not anti-Semitic. The gesture was first performed by a French comedian - and friend of Anelka - Dieudonne, who has convictions for anti-Semitism.
Anelka was charged by the FA with misconduct and found guilty after a two-day hearing at the end of February. An independent regulatory commission however accepted there was no intent by Anelka to be anti-Semitic.
West Brom fined him £80,000 and he was ordered to complete a compulsory education course.
The club has yet to confirm Anelka's revelation that he is set to leave, with their own investigation into the former Arsenal and Real Madrid star's actions expected to conclude next week.
Albion have already lost one sponsor as a result of the row.