Johnson played for the Colts in 2015 following a 12-season run with the Houston Texans in which he was named to the Pro Bowl seven times.
The 34-year-old Johnson appeared in all 16 games for Indianapolis last season, producing 41 catches for 503 yards and four touchdowns, a noted drop in receptions and yardage as he worked with a new team and quarterback uncertainty following injuries to Andrew Luck.
Cutting Johnson saves the Colts $5 million against the salary cap.
Entering the season as the No. 2 receiver behind T.Y. Hilton, Johnson never found his comfort zone in Indianapolis. There was a point where Griff Whalen was on the field on third down over Johnson, who didn't have more than 81 yards receiving in a game for the Colts.
Johnson has caught 1,053 passes in his career for 14,100 yards and 68 touchdowns. He ranks eighth all time in the NFL in career receptions and ninth in yardage.
Information from ESPN staff writer Mike Wells contributed to this report.