The Gabonese midfielder signed for Jack Ross's side for a club-record transfer fee of £13.6m two years ago but was most recently loaned out to Premier League side Watford for the second half of last season.
Ndong was an unused substitute three times for the Hornets but failed to make an appearance in his four months at the club.
"Sunderland AFC has given notice under its contract with Didier N'Dong," read an official statement from the club.
"The player, who was under contract with the club until June 2021, failed to return to Sunderland for pre-season training in July as scheduled, nor in the subsequent months that followed. No reason was given for his failure to report and continued absence.
"As a result, the club has accepted Didier Ndong's repudiatory breaches of contract and notice of the same has been provided to the player. Sunderland AFC does so whilst retaining the right to pursue the player and any club he may subsequently join in relation to compensation for the value of the player."
In the summer, it was reported that Sunderland's £7m agreement with Torino for the player fell through after a disagreement over personal terms.