Bayern Munich and Luca Toni have terminated the striker's contract by mutual consent, and the Italian is expected to complete a move to Genoa shortly.
Toni still had a year left to run on his deal but, after spending the second half of last season on loan at Roma, it was clear he was surplus to requirements at the Bundesliga club under coach Louis van Gaal.
The 33-year-old has been attracting interest from several clubs back home in Italy, most notably from Genoa, but the prospect of paying a transfer fee for his services seemingly put clubs off firming up their interest.
Toni and Bayern have therefore reached an agreement for the premature termination of the contract, making him a free agent with immediate effect.
"I would like to thank Luca Toni with all of my heart for his performances and goals, particularly in the 2007-08 double-winning season," Bayern chairman Karl-Heinz Rummenigge said. "I wish Luca Toni now all the best with the future at his new club."
That club is expected to be Genoa, whose president last week claimed they had agreed a two-year contract with the player. Reports suggest the deal was on the condition that he would be available on a free transfer.
Toni played a total of 60 Bundesliga matches for Bayern, scoring 38 goals and becoming the Bundesliga's top goalscorer in 2008. His goals also helped them win the DFB-Pokal and reach the semi-final of the UEFA Cup that year.
However, he fell out of favour under Van Gaal this season and spent the second half of the campaign on loan with Serie A outfit Roma, who chose not to make the transfer a permanent one this summer.