"I have a tremendous appreciation and admiration not only for the Dolphins organization but for the fans as well, for all of the support that they have given me," Thomas said in a statement, in which he thanked owner Wayne Huizenga, new football operations head Bill Parcells and general manager Jeff Ireland.
A fifth-round pick in 1996, Thomas has spent 12 seasons with the Dolphins, recording more than 1,500 tackles.
"Zach Thomas has been a great player on this team for many years," Ireland said. "And because of the type of player and the kind of person that Zach is, this was not an easy decision."
But Thomas' age and salary worked against him as the Dolphins begin a major rebuilding process with Parcells running the front office and Tony Sparano taking over as coach. Thomas will turn 35 in September and was scheduled to make $5.65 million in base salary in 2008.
"In addition to his numerous accomplishments on the field, he was a leader off of it as well," Ireland said. "We want to thank Zach for everything he has done for the Dolphins organization and the South Florida community."
Thomas missed most of last season because of concussions and migraines and was placed on injured reserve against his wishes in December because of nagging migraines, an aftereffect of an Oct. 21 car crash.
Thomas has been selected to seven Pro Bowls and is one of only three players to record 100 tackles in each of his first 10 seasons. Speculation about Thomas' future first began as the Dolphins struggled through a 1-15 season.
A source told ESPN.com that retirement is a possibility and Thomas will play again only if he can join a team that he views as having a legitimate shot at winning a Super Bowl.
"I am healthy and look forward to playing in 2008 but will always consider myself a Miami Dolphin," Thomas said.
Pat Yasinskas covers the NFL for ESPN.com. Information from The Associated Press was used in this report.