The 25-year-old defender, who has recently forced his way into the Welsh international squad, will be able to negotiate with other clubs as of July 1.
"He was offered a contract for the rest of this season and three more years in December," revealed Forest boss David Platt, "and he was made a better offer which he turned down in January."
"At the end of the day, he has been offered a contract which I think is a good one. If he thinks his career is elsewhere that's down to him."
Meanwhile, as contract talks with veteran goalkeeper Dave Beasant continue, Forest have also announced that they will release 20-year-old shot-stopper Steven Collis at the end of the season.
"If we had got into the Premiership we would have given him another year but I don't think it's in his interests to have another year here," conceded the former England captain.
Platt has also moved to dismiss rumours suggesting that David Prutton is about to join Newcastle United, saying: "I have not heard anything. There has been no contact from Newcastle and I have not seen any quotes from Newcastle themselves."
