The move will save the team $5.5 million against the salary cap, and those savings won't hit the books until after June 1.
The Cowboys signed Austin to a six-year, $54 million contract extension after a breakout season in 2009 when he caught 81 passes for 1,320 yards and 11 touchdowns.
Austin, 29, has been injury-prone since then, suffering from multiple hamstring ailments. Austin had just 24 catches for 244 yards and no touchdowns in 11 games in 2013, by far his worst season with the team.
Second-year receiver Terrance Williams is most likely to step up to the No. 2 receiver slot vacated by Austin. He had 44 catches for 736 yards and five touchdowns as a rookie in 2013.