The Primera outfit informed the former Boca Juniors hit-man at the end of last season that he no longer featured in the club's first-team plans, but have only now reached agreement with the player to tear up his contract.
The club confirmed that Palermo was now a free agent, stating that the agreement was 'to the full satisfaction of both parties'.
Palermo was pushed out of the picture at El Estadio Madrigal following a disappointing last season which saw him net just six league goals, and the arrival of two high-profile forwards at the club over the summer.
Villarreal boss Benito Floro brought in both Sonny Anderson and Jose Mari leaving Palermo very much in the cold.
The Argentine will now search for a new club, but has made clear his desire to remain Europe and has already been linked with a move to Portuguese outfit Sporting Lisbon.
| Click here and you could win Sky FREE for a year!! |
