The 24-year-old is returning to South America after making just five first-team apperances since signing for the Potters from Club Nacional in August 2009.
Arismendi spent the whole of last season on loan at Barnsley and also had spells with Huddersfield and Brighton.
Stoke's Chief Executive Tony Scholes said: "It has been an incredibly frustrating time for everyone because he came over here with such high hopes of making a name for himself in English football, but it clearly hasn't worked out that way for him.
"His contract with the Club would have come to an end next summer, but with him not in our 25-man Premier League squad and little prospect of another loan move, it was in the interests of both parties for us to terminate his agreement now.
"Diego will be returning to Uruguay immediately, so we would like to wish him all the best in finding a new club to get his career up and running again."
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