He was due a $2 million roster bonus next week.
The Jets have saved $8.3 million against the salary cap by releasing him.
Sanchez spent last season on injured reserve, undergoing knee and shoulder surgeries.
“I’d like to thank Mark for everything he’s done for this team and me personally,” Jets coach Rex Ryan said. “We were rookies together and had some early success, becoming the first rookie head coach and quarterback to go to back-to-back championship games. We experienced a lot together and I really appreciate Mark. He’s a great player, a great teammate, and I wish him nothing but the best.”
Sanchez went 37-31 as a starter. As a rookie, he passed for 2,444 yards.
He went to two AFC championship games, but struggled in 2011 and 2012 and was benched.
He led the NFL with 52 turnovers during that span.
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Aaron Wilson covers the Ravens for The Baltimore Sun