Yestin Eades will return home to Western Australia after his contract with the Bombers was rescinded by mutual agreement.
Eades stood down from the club in January as he faced charges for being involved in an alleged incident.
The nature of the incident has not been revealed but the court agreed to consider Eades as eligible for a diversion program with court records showing he is scheduled to have the matter heard on March 27.
"From the outset we had a very positive and open dialogue with the club about some of the challenges facing Yestin moving forward," Eades' manager Ray Purcell said.
"This was not an easy decision for Yestin to make, and he is very grateful the club understands the importance and sensitivities surrounding his decision to return home.
"The club has been very accommodating and shown genuine care for Yestin's well being and long term development.
"While Yestin still has some challenges ahead of him, he is extremely grateful for having the opportunity to develop as a person and footballer during his time at Essendon."