Sydney FC said on Monday they had terminated the contract of Brazilian defender Fabio Alves after one year with the Australian A-League club.
Head coach Frank Farina is in the process of reshaping his squad for next season and said he could not guarantee the left back a regular starting berth.
"I'd like to thank Fabio for his service to Sydney FC during the last 12 months," Farina said.
"We are looking to change things going forward and we couldn't guarantee Fabio the regular first team football he requires."
Sydney, with a number of high-profile players including Italian superstar Alessandro Del Piero in their ranks, failed to make the finals series comprising the top-six teams.
Central Coast Mariners beat Western Sydney Wanderers 2-0 in Sunday's grand final.