Ferdinand made 455 appearances for United, winning six Premier League titles, the 2008 UEFA Champions League and FIFA Club World Cup, two League Cups and five Charity/Community Shields.
But his playing time had been reduced over the last couple of seasons because of injury and the emergence of Phil Jones, Chris Smalling and Jonny Evans.
His contract was due to expire at the end of the season and the decision has been made not to extend it.
"I have thought long and hard over the last few months about my future and, after 12 fantastic years playing for what I regard as the best club in the world, I have decided the time is right for me to move on," Ferdinand said.
"I joined Manchester United in the hope of winning trophies, and never in my wildest dreams could I have imagined how successful we would be during my time here.
"There have been so many highlights, playing alongside some great players who have become good friends, winning my first Premier League title and also that fantastic night in Moscow are memories that I will cherish forever.
"Circumstances didn't allow for me to say goodbye the way I would have liked but I'd like to take this opportunity to thank my team-mates, staff, the club and the fans for an unbelievable 12 years that I'll never forget. Winning trophies I dreamed about as a kid came true at this great club.
"I am feeling fit and healthy, ready for a new challenge and looking forward to whatever the future holds for me."
Former Manchester United striker Dwight Yorke described Ferdinand as "colossal".
Yorke told Sky Sports: "The word colossal comes into play as that's the type of player that Ferdinand was.
"It doesn't come as a surprise but it's an end of an era for himself and Nemanja Vidic - it's unbelievable the amount of success they've had.
"Rio can leave that football club with his head held incredibly high in terms of what he has achieved."
The decision to let Ferdinand go ignores the advice of interim manager Ryan Giggs, who insisted earlier this month the defender could still make a useful contribution and should be offered a new deal.
Former Reds defender Gary Neville appeared to question the move when he wrote on Twitter: "So it looks like Rio and Vida allowed to leave at once!!! A conveyor belt has become a cliff!"
There were no hard feelings, however, as United said on their official Twitter account: "@mufc would like to thank Rio Ferdinand for his long and distinguished service, and wish him well for the future."