The Potters confirmed Pennant's exit in a brief statement issued through their official website on Saturday morning.
The statement said: "Stoke City can confirm that Jermaine Pennant has left the Britannia Stadium after the Club opted not to activate a clause to extend his existing contract until the end of the season, thereby leaving the winger free to look for a new club.
"The Potters would like to thank Jermaine for his efforts as a City player and wish him good luck for the future."
The former Arsenal and Liverpool player now becomes a free agent and can sign for another club even after the January transfer window expires.
Pennant found games hard to come by under Mark Hughes and his final act in a Stoke shirt was to concede a last-minute penalty in the 1-1 draw with Everton on New Year's Day.
"I met with the manager and he was honest with me, which I appreciated," Pennant was quoted as saying in the Daily Mirror. "I wasn't playing and at 31 now, I need to be playing games.
"I'd like to thank the club for the opportunity of a new challenge and would like to thank everyone at Stoke City and the fans for the fantastic support over the last few years.
"I'm looking forward to the new chapter in my life."
The 31-year-old signed from Real Zaragoza in the summer of 2010 before falling out with then manager Tony Pulis over claims he failed to report for a team meeting the night before a Premier League game.
He was then sent out on loan to Wolves but having been brought in from the cold by Hughes and scoring in a 1-0 win at West Ham in August, he was to make only seven further appearances.