The 25-year-old joined the club from Deportiva Francesca in 2010, but has struggled for opportunities this season with Gareth Steenson impressing in the number 10 position.
"Nacho is wanting to play more rugby, get more starts, and right now he is feeling that will happen more often at another club. What we have at the moment is a guy who is very passionate about playing - and he is desperate to play more for Argentina," said Baxter.
"I think because of those factors, he feels he now wants to go somewhere where he is going to start regularly and put himself in the shop window to get the best opportunity to play international rugby. It is a shame, of course, because we never like signing anyone here and them not seeing out their contracts.
"We tend to feel when you have a player for two or three years, that he will be an Exeter player for two or three years. However, it can't always be like that. As a club we're not going to be awkward and stand in his way, especially with the fact he feels he would like to go somewhere else."
Mieres has made 51 appearances for Exeter.