"He will no longer be on the Penn State football team," O'Brien said before Wednesday's practice.
Jones is the 14th player to leave the Nittany Lions since the NCAA levied sanctions against the program in connection with former defensive coordinator Jerry Sandusky's conviction of child sexual abuse. Nine players transferred while five, including Jones, remain students at Penn State.
The redshirt sophomore's departure is not connected with the sanctions but still leaves a shallow Penn State team with even less depth.
Jones told The Daily Collegian, Penn State's student newspaper, on Wednesday that he wasn't sure whether he was still with the team. Players on conference calls also said they were uncertain, but acknowledged Jones missed practice on Tuesday.
"It was a shock that I heard he wasn't going to be around anymore," quarterback Matt McGloin said. "Whether he decides to come back or leave, I wish him the best of luck."
Jones told ESPN in August that he considered transferring for about 11 days after the sanctions. He envisioned himself at Pittsburgh, but ultimately decided to stick with the school as the backup quarterback.
"I wouldn't turn my back on these guys because I know they wouldn't turn their back on me," he said at the time.
But Jones became disillusioned a few weeks ago when true freshman Steven Bench overtook him on the depth chart. He was moved to tight end and told reporters after the Navy game that he quit for about 20 minutes because of the switch. He rejoined the team soon thereafter.
O'Brien previously tried to downplay any division between Jones and the coaching staff. O'Brien said last week that the two sat down, and Jones felt good about the move.
"He's a team player," O'Brien said last Tuesday. "He loves the team. He loves Penn State."
Because Jones already participated in a game, he would not be eligible to play for another team this season. With the sanctions, however, he could transfer and play for another team next year.
He leaves Penn State with one career catch for seven yards and one run for minus-7 yards.