The 22-year-old joined the club from Great Yarmouth in July 2011, but has struggled to overcome a succession of injuries.
Burnett told the club's official website: "Jake has been a little bit unfortunate since he's been at the club and it has been a bit stop-start with him. He's now been limited to opportunities due to the fact that players have come in and done very well.
"I'd like to wish him all the very best and I hope he has lots of success throughout and during his football career."
Reed made 24 appearances for Dagenham last season, scoring just once.