The Serie A side confirmed on their official website that the 31-year-old had been released after three-and-a-half-years at the San Siro.
The former Manchester City midfielder has made just six appearances for the Rossoneri this season despite being a regular last term under Filippo Inzaghi.
"AC Milan announces that Nigel De Jong's contract with the club has been mutually terminated today," read a statement on the club's official website.
"AC Milan would like to thank the Dutchman for his determination, commitment and professionalism shown during his time with the Rossoneri.
"We wish him all the success possible and all the very best for the next stage of his career."
Reports from either side of the Atlantic have linked De Jong with a move to Major League Soccer side LA Galaxy where he could link up with former Chelsea left-back Ashley Cole and ex-Liverpool captain Steven Gerrard.
