The Denver Post reported Monday that Salo has decided to retire from the NHL and likely will play for MoDo of the Swedish Elite League next season.
Salo had an option year on a $4 million contract for next season, a figure the Avalanche are likely to decline.
Salo began his NHL career with the New York Islanders in 1994-95 and later landed in Edmonton, where he was the No. 1 goalie for the Oilers for several seasons. His career record is 210-225-73 with a 2.55 goals-against average.
Salo's departure likely means Philippe Sauve will get another chance as the Avs' backup goalie, according to the Denver newspaper. Sauve and Peter Budaj, who started for the Hershey Bears this season, could fight for the job in training camp.
Information from SportsTicker was used in this report.