Brazilian international Fred has had his contract with Lyon terminated.
The striker, who had interested Tottenham during the January transfer window, is now expected to join Fluminense.
The French champions confirmed in a statement: "Lyon announce that Fred has taken the decision to terminate his contract during his time off in Brazil.
"The termination of his contract with Lyon takes effect this evening and allows him to sign for a Brazilian club."
Fred, whose contract was due to expire in June, was suspended by Lyon last weekend.
The 25-year-old signed from Brazilian team Cruzeiro in August 2005 but has been frozen out at Stade Gerland this season after becoming disillusioned with his lack of playing time.
Fluminese announced two weeks ago that they had reached an agreement with Fred, who has played nine games for Brazil, scoring five times.