Palardy was in his fourth CFL season. The Bombers (1-7) also released sophomore receiver Isaac Anderson.
Winnipeg also added kicker Brody McKnight to its practice roster.
Palardy joined the Bombers midway through the 2010 campaign after being let go by the Hamilton Tiger-Cats. The 25-year-old native of Truro, N.S., made 26-of-30 field goals that year, a Winnipeg single-season record of 86.7 per cent.
This year, Palardy converted nine-of-12 field goals (75 per cent) and was eighth among CFL kickers with 40 points.
Overall, Palardy has made on 114-of-139 career field goals (82 per cent).
McKnight, a Vancouver native, was a 2011 first-round draft pick of the Montreal Alouettes. He also spent time with Edmonton, Saskatchewan and Hamilton.
Anderson had 21 catches for 244 yards in seven games with Winnipeg this season.