The Royals had designated Chen for assignment a week ago.
Chen, who made his major league debut in 1998, spent the last six seasons in Kansas City. He was 2-4 with a 7.45 ERA in 48 1/3 innings this season.
The veteran is free to sign with any team.
In his 16-year career, Chen has compiled an 82-80 overall record and 4.58 ERA. He has 1,136 strikeouts in more than 1,500 career innings.
Chen signed a one-year, $3 million contract prior to the season, which included a 2015 player option worth $5.5 million.
- Molly Geary