The 32-year-old defender, who has been with the Glasgow-based outfit for six years, has announced today that he has played his last game for the Gers.
Reports had suggested that the long-serving full-back would depart Ibrox after picking up a groin injury last month, which will require surgery.
"After six seasons of playing for Rangers, the time has come for me to leave my place for someone younger who will be able to contribute to new successes at the club with passion and zest," Papac told the club's official website.
"I would like to use this opportunity to say thank you to all the staff at Murray Park, as well as all the club's staff who I had excellent rapport with. I would also like to say thanks to all the players and trainers I have worked with in the last six seasons, when I achieved the biggest successes of my career.
"Special thanks go to Walter Smith, without whom all those achievements would not have been possible. Last but by no means least, I want to say a big thanks to the fans who have always provided the biggest support and made this club one of the greatest in the world. I wish them lots of luck and all the very best to the manager Coisty and the team in years to come. We are the people!"
Papac, who will become a free agent at the end of Rangers' campaign, has reportedly attracted interest from a number of clubs in England.