On Sunday at Ford Field, Kelly was dressed and active for the game against the Minnesota Vikings but coaches elected not to play him.
The Lions apparently wanted to use younger cornerbacks during their final three games. Kelly now has a chance to land with a playoff team that might be looking for a cornerback who can start.
Kelly came to Detroit during the offseason to reunite with Rod Marinelli, a former Bucs defensive line coach who was popular among Bucs defensive players. Marinelli wanted veterans who knew the Bucs' cover-two system, and Kelly appeared to be a perfect fit.
The 32-year-old Kelly spent 10 seasons with the Bucs before joining the Lions. Kelly, who received a $3.25 million bonus, won't lose any money with the release. His $1.25 million base salary was guaranteed when he made the Lions' 53-man roster.
If he doesn't land a job in the next three weeks, he can apply for termination pay under terms of the collective bargaining agreement and get those three remaining game checks.
The Lions signed cornerback and kick returner Dexter Wynn to take his place.
Wynn spent his first two NFL seasons with the Philadelphia Eagles and played the following two seasons for the Houston Texans. In 51 career games with 41 starts, he has averaged 21.4 yards on kickoff returns and 8.6 yards per punt return.
In other Lions news, the team announced on Tuesday that it fined center Dominic Raiola $7,500 for inappropriate conduct when he made a gesture toward fans during Sunday's game against Minnesota.
"We have tremendous respect and appreciation for all of our fans and we believe Dominic's behavior this past Sunday was not consistent with what we expect from members of our team," Lions executive vice president and COO Tom Lewand said.
"Our players, coaches and staff are held to high standards of sportsmanship and conduct. We are disappointed with Dominic's behavior and apologize to any fans who were offended by it."
The fine will be donated to a Detroit-area charity.
Senior writer John Clayton covers the NFL for ESPN.com. Information from The Associated Press was used in this report.