The oft-injured 27-year-old played only the first eight games for Seattle this season before tearing his ACL during a Week 8 game in St. Louis.
Rice, who signed a five-year, $41 million deal with the Seahawks in July 2011, was owed $17.5 million in base salary over the next two seasons, according to ESPN.
Rice has missed 25 regular season games the last four seasons after catching 83 passes for 1,312 yards and eight touchdowns in 2009 for the Vikings, when he made the Pro Bowl. He also had 10 catches for 184 yards and four TDs in two playoff games that year.
He suffered a concussion and injured his shoulder in 2011, his first season with the Seahawks, but played the entire 2012 season, amassing 748 receiving yards and seven touchdowns in the regular season and 87 receiving yards in two playoff games.
Three Seattle receivers — free agent Golden Tate (898), Doug Baldwin (778) and Jermaine Kearse (346) — had more receiving yards than Rice (231) this season. SI WIRE: Report: Washington TE Fred Davis arrested for DUI one day after suspension