The 33-year-old forward signed a $50.75 million contract (average annual value $7.25 million) with the Senators on Oct. 2, 2014. He scored eight points (five goals, three assists) in 24 games this season, taking an extended leave of absence in November to enter the NHL/NHLPA player assistance program, citing issues with alcohol abuse.
Ryan, who returned against the Nashville Predators on Feb. 25 and two days later scored a hat trick in his first home game back, a 5-2 win against the Vancouver Canucks, won the Masterton Trophy for perseverance and dedication to hockey.
"This was a decision that required a lot of consideration," Senators general manager Pierre Dorion said. "Bobby's long been a deserving fan favorite in Ottawa. While we're appreciative of his efforts on the ice, it's outweighed by how proud we are of him for the courage that he has demonstrated off of it. As we continue to take strides in our rebuild, this decision was one that we felt was best for the organization. We wish he and his family the best as he moves forward."
Ryan, acquired in a trade with the Anaheim Ducks on July 5, 2013, will become an unrestricted free agent when the signing period begins Oct. 9.
"While the news this morning came as a bit of a shock, I understand the decision," Ryan told TSN on Thursday, when the Senators placed him on waivers for the purpose of buying out his contract. "The unwavering support in the last year in particular has given me tears on many occasions. … Ottawa will have a special place in our [family's] heart forever."
After scoring at least 30 goals and 57 points in four straight seasons with the Ducks from 2008-12, Ryan never scored more than 23 goals or 56 points in seven seasons with the Senators.
Selected by Anaheim with the No. 2 pick in the 2005 NHL Draft, Ryan has scored 555 points (254 goals, 301 assists) in 833 regular-season games and 32 points (18 goals, 14 assists) in 51 Stanley Cup Playoff games.
"To my teammates, past and present to wear the jersey, it was a pleasure to skate with you guys," Ryan said. "Countless memories of good and bad I'll never forget. … The Sens are an [up-and-coming] young team with so many bright years ahead of them. I'm excited to follow along as a fan of all the young players with the rest of you."
