The 33-year-old suffered a cruciate ligament injury at the beginning of last season which ruled him out of the entire 2011-12 campaign, but he did return to the first-team picture this season.
However, the club have announced that Hazell has had his contract terminated by mutual content.
"Shrewsbury Town defender Reuben Hazell has had his contract terminated by mutual agreement. The club would like to thank him for all his work during his time here and wish him well for the future," the statement read.
Hazell began his professional career at Aston Villa.