Angels spokesman Tim Mead confirmed the decision Wednesday. Murphy gets a $500,000 buyout.
Los Angeles acquired Murphy from Cleveland in late July for the playoff stretch. The 10-year veteran was a dependable contributor while batting .265 with five homers, starting as a designated hitter and then platooning in left field.
The Angels are expected to pursue higher-profile free-agent outfielders this winter. They also plan to stay in communication with Murphy.