Palmer was in the final year of his deal at Wrexham and had been expected to leave the club this summer after falling down the pecking order as they reached the second tier and bolstered their front line.
He had not played in a competitive fixture since February when he scored two stoppage-time headers against Hull City in the EFL Cup earlier this month, to send the game to penalties which Wrexham went on to win 5-3.
Palmer has also played for Crawley, Leyton Orient, Mansfield, Lincoln, AFC Wimbledon, Luton and Grimsby across his career which has seen him play more than 500 games in English football.
Confirming the departure on social media Wrexham said: “After an historic three-and-a-half-year association with the Red Dragons, an agreement has been reached for Ollie Palmer to depart the Club by mutual consent.”
The Ryan Reynolds and Rob McElhenney-owned Championship club added: “All the best for the future, Ollie!”