The 35-year-old Smith, a fiercely competitive, undersized receiver, had been a steady bright spot over the years for a Panthers team that reached the playoffs last season for the first time in five years.
"Steve Smith has been one of the NFL's finest receivers for over a decade and has been the face of the franchise for a large part of the team's history," Panthers General Manager Dave Gettleman said in a statement.
"This was not an easy decision. As a team, we made a step forward last year; however we are also a team in transition, which is a part of the NFL."
The elusive, 5-foot-9 Smith holds over 30 franchise records on offense and special teams.
He is the Panthers' all-time leader with 75 touchdowns, 836 receptions, 12,197 receiving yards and 43 games with 100 or more receiving yards.
In 2013, Smith had 64 catches for 745 yards and four touchdowns, a drop of nine receptions and 429 receiving yards from the previous season.
"He is a great competitor with Hall of Fame worthy statistics and has made a great contribution to our community," said Panthers coach Ron Rivera. "I wish him nothing but the best."
One talented veteran did not get his wish to become a free agent when the New Orleans Saints instead traded versatile running back Darren Sproles to the Philadelphia Eagles.
Sproles, 30, a threat catching the football as well as running it, had looked to be heading for free agency as a salary-cap cut by the Saints, who instead took a fifth-round pick in this year's draft from the Eagles as compensation.
The speedy Sproles finished last season with 43 carries for 220 yards, 71 receptions for 604 yards and scored four touchdowns.
In addition to a prominent role on the Eagle's up-tempo offense, Sproles may also contribute to the NFC East champions as a return man.
While Sproles missed out on free agency, premier cornerback Darrelle Revis took advantage of his status to join perennial contenders the New England Patriots.
After being released by the Tampa Bay Buccaneers, Revis agreed to terms with the Patriots on a one-year, $12 million contract late on Wednesday.
Revis will replace Aqib Talib, who left the Patriots as a free agent to sign with the Denver Broncos.
Revis was cut after one season with the Bucs, who would have owed him $16 million for the upcoming season.
While Revis takes a pay cut, he will still earn about $2 million more than the next highest paid NFL cover man and could be eligible to shop his skills again as a free agent after the season.
- Sports & Recreation
- American Football
- Steve Smith
- Darren Sproles
- Darrelle Revis