Southend have given Jemal Johnson 14 days notice of their intention to terminate the winger's contract at Roots Hall.
Johnson, a free summer signing on a 12-month deal, was suspended by the League Two club for two weeks at the end of November pending a full review into his conduct following his October arrest by police outside a nightclub in Ilford.
The American, 26, was not considered for selection and did not take part in training during that time, with an internal disciplinary hearing taking place last Wednesday.
A decision has now been taken that Johnson has no future at the Essex club, subject to an appeal.
A statement on Southend's official website read: "Southend United can confirm it has provided Jemal Johnson with 14 days notice of the football club's intention to terminate his contract.
"The decision follow an internal investigation and disciplinary hearing into the conduct of the player following his arrest at a nightclub in late October. Mr Johnson has 14 days in which to appeal the decision. No further comment will be made."