Ferdinand has lost his place in the United first team over the last couple of years due to a series of injuries and because of the emergence of Phil Jones, Jonny Evans and Chris Smalling.
The 35-year-old former England captain will therefore leave Old Trafford although he has no desire to retire and is now looking for a new club.
In a statement on his website, Ferdinand said: "I have thought long and hard over the last few months about my future, and after 12 fantastic years playing for what I regard as the best club in the world, I have decided the time is right for me to move on."
Ferdinand moved to Old Trafford from Leeds in July 2002 for a then British record transfer fee of £29.1million, which also made him the world's most expensive defender.
He won the Premier League title in his first season at the club and went on to lift the trophy five more times in 2007, 2008, 2009, 2011 and 2013.
Ferdinand also won the Champions League in 2008 as the Reds beat Chelsea on penalties in the final in Moscow, as well as two League Cups and a Club World Cup.
His statement continued: "I joined Manchester United in the hope of winning trophies, and never in my wildest dreams could I have imagined how successful we would be during my time here.
"There have been so many highlights, playing alongside some great players who have become good friends, winning my first Premier League title and also that fantastic night in Moscow are memories that I will cherish forever.
"Circumstances didn't allow for me to say goodbye the way I would have liked but I'd like to take this opportunity to thank my team-mates, staff, the club and the fans for an unbelievable 12 years that I'll never forget. Winning trophies I dreamed about as a kid came true at this great club.
"I am feeling fit and healthy, ready for a new challenge and looking forward to whatever the future holds for me."
Sky Bet’s Head of Football Trading Paul Wiggins said: "We reckon a move to America would appeal to Rio and it would make sense given his age and commercial attraction.
"A return to West Ham may happen though, or perhaps even a move to Australia - we offer 12/1 for him to join any A-League side."
Rio Ferdinand factfile
1978: Born November 8, Peckham.
1995: Turns professional with West Ham.
1996: May - Makes West Ham debut as substitute in draw with Sheffield Wednesday.
1997: February - Scores first West Ham goal in defeat at Blackburn.
November - Becomes youngest defender to play for England when he makes debut against Cameroon at Wembley.
1998: Named in Glenn Hoddle's England World Cup squad but does not play at tournament in France.
2000: Left out of the England squad for Euro 2000 by Kevin Keegan. Makes British record £18million move to Leeds in November.
2002: Scores first England goal in 3-0 win over Denmark in World Cup second round.
July 21 - Leeds agree to sell Ferdinand to Manchester United for £29.1million, making him the world's most expensive defender.
2003: May - Earns first Premier League winner's medal.
October - Reported to the Football Association for failing to attend a drugs test, and left out of England squad for Euro 2004 qualifier against Turkey because of the controversy.
December 18 - Receives eight-month ban and £50,000 fine over missed drugs test.
2004: January 20 - Ferdinand begins his ban, which means he misses Euro 2004.
2005: August 8 - Agrees new four-year deal with United.
2007: November 21 - Absent through injury as England lose 3-2 to Croatia at Wembley and fail to qualify for Euro 2008.
2008: March 26 - Captains England for the first time and wins his 65th cap in 1-0 defeat in France.
May 15 - Signs new five-year United deal.
May 21 - Captains United to a Champions League final victory over Chelsea in a penalty shoot-out in Moscow.
2009: May 16 - United wrap up third successive Premier League title.
May 27 - Part of United team beaten 2-0 by Barcelona in Champions League final.
2010: February 5 - Succeeds John Terry as England skipper after Chelsea defender is stripped of post by manager Fabio Capello following allegations about Terry's private life.
June 4 - Ruled out of World Cup after injuring ligaments in his left knee in training.
2011: March 19 - Loses England captaincy to Terry, ahead of Euro 2012 qualifier against Wales.
May - Wins another Premier League title with United - his fifth. United lose 3-1 to Barca in Champions League final at Wembley.
2012: February - Rules himself out of the running to captain England after Terry is stripped of the duty pending the outcome of a July trial. Terry is due to answer a charge of racially abusing Ferdinand's brother, QPR defender Anton Ferdinand, but is later acquitted.
May 16 - Left out of England's squad for Euro 2012. He later writes on Twitter: ''Absolutely loved playing for england... to say I'm gutted is an understatement of the highest order...''
August 17 - Fined £45,000 by the FA for acknowledging a tweet which referred to Ashley Cole - who gave evidence in defence of John Terry in his trial - as a 'choc ice'.
December 9 - Struck by a coin thrown from the crowd at Manchester City's Etihad Stadium as United claim a 3-2 derby victory.
2013: March 5 - Escapes UEFA action after sarcastically applauding Turkish referee Cuneyt Cakir at the end of home defeat to Real Madrid in the Champions League.
March 14 - Recalled to the England squad for World Cup qualifying matches against San Marino and Montenegro but pulls out four days later due to concerns over a long-standing back injury.
March 21 - Forced to defend his decision to fly to Qatar to work as a television pundit for England's game against San Marino. Hodgson responds by saying he will ''wait and see'' when asked about Ferdinand's international future.
May 15 - Announces his retirement from England duty.
May 23: Signs a new one-year deal with Manchester United.
2014: May 12: Announces he has not been offered a new contract and will leave United after 12 years at the club.
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