The right-hander was designated for assignment before Wednesday night's 7-4 loss to the New York Mets, a day before his 28th birthday. Washington has 10 days to trade, release or send him outright to the minors, a move Cabrera had said he would probably refuse.
Demoted from the starting rotation, Cabrera made his second relief outing in 156 major league appearances on Monday and got just two outs while walking the bases loaded.
He agreed to a $2.6 million, one-year contract with Washington in late December, after he became a free agent when Baltimore refused to make an offer. The 6-foot-9 Cabrera went 48-59 with a 5.05 ERA in five seasons with the Orioles, but has had four straight losing seasons after going 12-8 as a rookie in 2004.
"Things just didn't work out for us," Nationals manager Manny Acta said. "We signed Daniel not only thinking about this year, but about being part of the future. It didn't work out for us or for him."
Washington filled the roster spot by recalling catcher Luke Montz from Double-A Harrisburg. He batted a combined .158 with two homers and eight RBIs at Harrisburg and Triple-A Syracuse.
Montz was optioned back to Harrisburg after Wednesday's game, clearing room for Washington to purchase the contract of pitcher Mike MacDougal from Syracuse on Friday before the Nationals play at Philadelphia.
The Nationals had until Friday to promote MacDougal, a former All-Star closer, or possibly lose him to free agency.
MacDougal signed a non-guaranteed deal with Washington on May 3.
"Mike's been throwing the ball extremely well down in Triple-A, really good velocity, throwing strikes for the most part, and he's got experience at the end of games," acting general manager Mike Rizzo said. "We figured he earned a chance to prove what he can do in the big league level."
The Nationals are missing No. 1 catcher Jesus Flores, who is on the disabled list with a right shoulder injury. He is on track to rejoin the team Friday, Acta said.
Backup catcher Josh Bard left the team Wednesday to be with his wife, who is expecting a baby. He is set to return Friday.