The team announced the move Tuesday afternoon.
The Jazz now have an extra roster spot and the flexibility to make a move to help offset injuries.
Millsap played in 67 games over two seasons with the Jazz and averaged 4.2 points, 2.8 rebounds and 1.1 assists. The 6-foot-6, 225-pound wing recently fell out of the rotation despite injuries to Alec Burks, Derrick Favors and Rudy Gobert. Reserve Chris Johnson saw his minutes increase as Millsap's decreased.
The roster now stands at 14.
The Jazz travel to face the San Antonio Spurs on Wednesday.