The veteran midfielder joined the Suffolk club 12 months ago on a free transfer following Birmingham's relegation from the Premier League.
But, with his one-year deal set to come to an end at Portman Road, manager Paul Jewell has revealed he will not be offering the 35-year-old fresh terms.
Bowyer has made 24 starts and five substitute appearances for Town this season, scoring two goals including the winner in a memorable 1-0 triumph at West Ham in late September.
It comes as Jewell plans to add youth to his wealth of experience already at Ipswich in order to launch a play-off charge next season.
It is understood Bowyer plans to continue playing and will be on the lookout for a new club over the coming months.