Taylor was asked by the Redskins to take part in 75 percent of their offseason workouts, a source told ESPN.com's John Clayton. That would have required him to be at the Redskins' facility during eight of the 13 weeks of the offseason program, three days a week.
Family took precedence over the money.
With three children, Taylor, who has a home in the Miami area, opted not to agree to the workout provisions. The team was willing to keep his restructured salary at $8.5 million, but his desire to be with his family in the offseason was more important in his life.
"He wanted to spend the offseason with his family," said Taylor's agent, Gary Wichard. "He just kind of chose family over going up there."
The flap is reminiscent of last year, when Taylor clashed with the Miami Dolphins for competing in "Dancing With the Stars" rather than working out with the team in the offseason. Taylor finished second to Kristi Yamaguchi on the reality television show, then was shipped by the Dolphins to the Redskins.
That meant Taylor spent virtually the entire year apart from his wife and children in Florida.
"He had been away for four months in Los Angeles, then he got back to Miami and then he got traded," Wichard said. "He wanted to spend time with his three kids."
For their part, the Redskins needed cap room for a six-year, $54 million contract signed last week by cornerback DeAngelo Hall.
"Jason Taylor was a real professional during his time with the Redskins," coach Jim Zorn said in a statement. "He played hurt, but still gave his best effort to be prepared and play hard every week. We wish him and his family the very best."
The six-time Pro Bowl end had been considered a possible salary cap cut in Washington because of the value of his contract.
Instead, Taylor turns out to be another expensive Redskins bust, one who cost the team two draft picks and gave them one ineffective, injury-plagued season.
Taylor was acquired on the first day of training camp after Phillip Daniels went down with a season-ending knee injury. The Redskins gave up a second-round draft pick in 2009 and a sixth-round selection in 2010.
But Taylor, who was healthy for nearly all of his 11 seasons in Miami, sprained his knee during preseason and then suffered an unusual calf injury during the win over the Arizona Cardinals on Sept. 21. Taylor required an emergency operation to have blood drained from his calf and had a second procedure about a month later.
The calf injury caused him to miss three games and hampered Taylor for much of the season. He also struggled to fit into a Redskins' defensive scheme that gave him less freedom than he had with the Dolphins. Taylor, whose 120½ career sacks are the most among active players, had only 3½ for the Redskins, his lowest season total since 1999.
The move rules out a chance for the Redskins to field a defensive line that would consist of three renowned sack-masters: Taylor, Andre Carter and Albert Haynesworth, who on Friday signed a seven-year, $100 million contract with a record-breaking $41 million in guaranteed money.
With Taylor gone, the Redskins are expected to focus on re-signing defensive ends Daniels and Demetric Evans, who became free agents last week.
Despite his departure from the Dolphins, Taylor is still interested in continuing his NFL career.
John Clayton is a senior NFL writer for ESPN.com. Information from The Associated Press was used in this report.