Vick is eligible to immediately sign with a team even though he has not been reinstated by NFL commissioner Roger Goodell.
Falcons general manager Thomas Dimitroff said the team relinquished its contractual rights to Vick on Friday.
"Michael remains suspended by the NFL," Dimitroff said. "However, in the event NFL commissioner Roger Goodell decides to reinstate Michael, we feel his best opportunity to re-engage his football career would be at another club."
The move was no surprise.
"Everybody always knew that Mike wouldn't be playing with the Falcons," Vick's agent, Joel Segal, said. "He's really just taking it one day at a time."
The NFL had no comment on Vick's release.
Goodell has said he will sit down with Vick after the quarterback completes his 23-month sentence on July 20 for running a dogfighting ring.
"Michael's going to have to demonstrate to myself and the general public and to a lot of people, did he learn anything from this experience? Does he regret what happened?" Goodell said last month at the NFL meetings in Fort Lauderdale, Fla. "Does he feel that he can be a positive influence going forward? Those are questions that I would like to see when I sit with him."
Vick's currently making $10 an hour as a construction worker for W.M. Jordan Co. while he serves the final two months of his sentence on home confinement in Hampton, Va. He was released from federal prison in Kansas on May 20.
Even while making it clear Vick had no football future with the Falcons, Falcons owner Arthur Blank has said he would be available to assist Vick.
"Our entire organization sincerely hopes that Michael will continue to focus his efforts on making positive changes in his life, and we wish him well in that regard," Dimitroff said Friday.
Vick was the Falcons No. 1 draft pick in 2001. He played six seasons with the team, but the Falcons moved on by making quarterback Matt Ryan their No. 1 pick last year. Ryan started every game as a rookie and led the Falcons to the playoffs.
Vick was the figurehead for the Falcons and, as a dual-threat quarterback, was one of the NFL's most dynamic stars from 2001-2006 before his sudden downfall.
Speculation about Vick's NFL future started even before his release from the Falcons.
Jim Mora, whose Vick-led team advanced to the NFC championship game in 2003, said this week he doesn't expect Vick to find a job with his Seattle team.
"I'll just say this for the record: We are very happy with the quarterbacks we have on our roster," Mora said. "We have no intentions of adding another player to our roster at this time. ... Just cut out the 'at this time,' because then people will speculate for the next three months. We have no intentions of adding a quarterback to our roster."
Colts owner Jim Irsay also said his team would not pursue Vick.
"We're not looking at that situation. We don't have an interest there," Irsay said.
Mora said Vick deserves another chance in the league.
"I believe he's paid his debt to society," Mora said.
Even as he hopes for reinstatement from Goodell and begins his search for another NFL home, Vick faces other pressing priorities, including his crumbled finances.
On Tuesday, U.S. Bankruptcy Judge Frank Santoro set a July 2 deadline for Vick to submit a revised Chapter 11 plan. A hearing to confirm or reject the plan was set for Aug. 27.
Santoro said that if the new plan fails to address the shortcomings that prompted him to reject the first one in April, he will appoint an independent trustee to take over management of Vick's finances.