The Berlin-born midfielder has been suspended since May when his attitude was questioned by sporting director Horst Heldt. Boateng is free to sign for another club in January 2016.
Schalke have mutually terminated the contract of Ghanaian international Kevin-Prince Boateng, but have refused to disclose the reasons behind the agreement.
The Royal Blues suspended the midfielder in May following the 2-0 defeat to Cologne and Boateng hasn't played for the club since.
A statement from the club read: "He made 60 competitive appearances [46 in the Bundesliga, twelve in European competitions and two in the DFB Cup], in which he scored seven goals. The 28-year-old will become available to play for other clubs on 1st January 2016."
Boateng, who signed from AC Milan in 2013, has been linked in recent weeks with a return to the Italian club.