The 29-year-old played a key role during Norwich's quick rise from League One to the Premier League between 2009 and 2011.
However, a succession of injuries and loan spells away from Carrow Road have resulted in the midfielder finding starting opportunities hard to come by in recent months.
As a result, the Canaries have decided to release the Scot to allow him to gain some regular action elsewhere.
"In my time at the football club, Simon's application and attitude has been excellent, and I would like to wish him all the very best for the future," manager Chris Hughton told the club's official website.
Early reports have suggested that Lappin may continue his career back in his native Scotland.