MK Dons winger Danny Green has had his contract terminated by mutual consent.
George Elokobi has returned to Colchester on a free transfer from Oldham.
The 18-year-old has put pen to paper a one-year deal, with the option of a further 12 months.
Preston has been with the Blues academy for over five years.
He had a loan spell at Skrill North side Worcester City last season where he made two first-team appearances for the Dragons.