After more than a week of negotiations over Carney's services, it finally came to a head on A-League transfer deadline day on Tuesday afternoon.
With the Jets having given Carney no guarantee of a new contract beyond this season, and Sydney keen to sign him with a view towards their upcoming AFC Champions League campaign, talks centred on a player-trade arrangement for one or more of the Sky Blues' players.
But it's understood that one of the main swap options, winger Andrew Hoole, was unable to be persuaded to rejoin his former club, less than a season after he left the Jets.
Instead, Football Federation Australia-owned Newcastle have effectively allowed Carney to leave for free, despite months remaining before his contract expires.
"Newcastle Jets have determined that retaining Carney for the remainder of his contract is no longer in the club’s best interests and have agreed to his request for a release," the club's release read.
"The terms of Carney’s mutual termination with the club shall remain confidential."
Carney, who played 37 A-League matches for the Jets and netted three goals in the process, will return to the Sky Blues, where he was pivotal in helping the club claim the inaugural A-League title 10 years ago.