The decline on his option means that Afflalo will become an unrestricted free agent on June 30, though teams are not allowed to announce signings until July 9.
Afflalo would have been in the final season of a five-year, $36.7 million contract he signed with Denver in 2011.
Afflalo, 29, was traded to Denver from the Portland Trail Blazers in February at the NBA trade deadline as part of a five-player deal.
Afflalo averaged 10.6 points in 25 regular-season games last season. He averaged 13.3 points, 3.2 rebounds and 1.7 assists in 78 games.
Portland still maintain the Bird Rights to Afflalo, but he has an $11 million cap hold for next season.
Afflalo was originally a first-round pick by the Detroit Pistons in the 2007 NBA draft.
In eight NBA seasons, Afflalo has averaged 11.4 points, 3.2 rebounds and 1.7 assists per game.
- Scooby Axson