The 22-year-old joined Crawley from West Brom in the summer and made 21 appearances.
But he has not figured since Boxing Day and was loaned out to Northampton in January.
Town chief executive Michael Dunford told the club website: "James is now looking to further his career elsewhere and is talking to a club in Norway. We wish him all the best and thank him for his services to Crawley Town."
Meanwhile, goalkeeper Ross Atkins has returned to Derby County at the end of his loan spell.
And striker Rory Fallon has been called up to the New Zealand squad, meaning he will miss next Tuesday's clash with Stevenage.