Kaeding kicked in the first three games before injuring his groin on Sept. 28, two days before a game at Kansas City. That forced the Chargers to sign Nick Novak and they had carried both kickers on the active roster since then.
Novak was signed by the Chargers last year after Kaeding blew out his left knee trying to make a tackle on the season-opening kickoff.
Kaeding is the most accurate kicker in NFL history, making 180 of 207 field goal attempts, or 87 percent.
However, he's best known in San Diego for missing three field goals in a 17-14 home playoff loss to the New York Jets in January 2010, San Diego's last postseason appearance. He also was wide right on a 40-yard attempt in overtime that would have beaten the Jets in a playoff game following the 2004 season. The Jets moved down the field and won it 20-17 on Doug Brien's 27-yarder.
Kaeding's roster spot went to wide receiver Danario Alexander, who signed a one-year deal.
"We had to make a decision," coach Norv Turner said. "We were going a man short and we had the chance to add a receiver. Nate is going to continue his rehab. He's been a great player for us. I think the world of Nate. It is a difficult decision but it's just something we had to do at this point."
Kaeding made all seven field goal attempts this season.
Novak has missed once in six tries.
"I just want to acknowledge how well Nate did," Novak said. "He worked his tail off to get back and had a great training camp. It was unfortunate his groin got a little beat up this year. For me, I've been here four weeks now. I didn't know how long I was going to be here, but I approached every week like I was the guy. I feel bad for Nate."