Beale endured a troubled campaign with Melbourne before joining the Wallabies squad this summer, spending a month on the sidelines after punching teammates on a trip to South Africa.
Rebels chief executive Rob Clark has confirmed that Beale will leave the club on a free transfer during the close season, with a move to Sydney most likely.
He said: "Whilst Kurtley has been a valuable and popular player for the Rebels over the last two years, it is no secret that he has been facing some significant personal challenges.
"The Rebels have supported him through this process and at all times have made decisions in the best interests of Kurtley's welfare. Kurtley will continue his off-field programme in Sydney and the Rebels believe that he should remain there supported by his family network.
"The Melbourne Rebels have announced some major changes in recent weeks, signifying a strong intention to elevate the performance of the organisation and build a sustainable winning culture both on and off the field."