The 24-year-old was U's boss Joe Dunne's first new signing in January when he arrived from Portsmouth, for whom he had made 13 appearances over the first half of this season.
But Compton has managed just one start and six substitute outings for Colchester since his arrival and will not be offered a new deal at the Weston Homes Community Stadium.
Dunne told the club's official website: "It's never nice to have to tell a player he's no longer needed and that was the case with Jack.
"He's been a great professional in his time here but found it hard to break into the first team. I wish him all the best in his endeavours elsewhere and thank him for the hard work he put in here."
On-loan striker Troy Hewitt has also returned to parent club QPR having stepped off the bench just once for Colchester during his month-long stay with the club.