Under the terms of the new collective bargaining agreement, each NHL club was given two compliance buyouts it could use prior to the end of the 2013-14 season.
The Flyers used the first last week on 35-year-old forward Daniel Briere.
"This was a very difficult business decision to make for us and we want to thank Ilya for his time here and wish him all the best moving forward," Flyers general manager Paul Holmgren said in a statement.
The Flyers will be on the hook for two-thirds of what remained in salary on the deal, approximately $23 million US. That amount can be spread over 14 years, which represents twice the length of the seven years that remained.
Bryzgalov was signed with much fanfare after starring for an unheralded Phoenix team for four seasons, which included recognition as a Vezina Trophy finalist in 2010.
The Flyers traded for the pending free agent's negotiating rights in 2011, and proceeded to sign him to a $51 million US deal over nine seasons.
The Russian netminder allowed 27 goals in his first nine regular season games with Philadelphia and puzzled teammates and reporters with his enigmatic fashion. He finished the 2011-12 campaign in fine form, with four shutouts in March, but had a 3.46 goals-against average in the post-season as the Flyers bowed out in two rounds.
Philadelphia didn't make the playoffs the past season, with Bryzgalov managing one shutout in 40 games, with a 2.79 goals-against average and .900 save percentage.
Philadelphia traded Bryzgalov's backup Sergei Bobrovsky almost exactly one year ago to Columbus. Bobrovsky went on to win the Vezina the past season as top NHL goalie.
As a result of the Bryzgalov buyout, the Flyers now have former Blue Jackets netminder Steve Mason at the top of their depth chart.
For his career, Bryzgalov has compiled 30 shutouts in 425 regular season games, with a 2.55 goals-against average and .913 save percentage. He began his NHL career with the Anaheim Ducks.
He will be free to sign with any NHL club.