General manager Buddy Nix formally announced the team had filed the transaction papers to the NFL after he spoke with Schobel earlier in the day. The move comes two days after Nix said the team was moving on without Schobel, who spent the offseason contemplating retirement.
"If he chooses to retire, he will do so as a Buffalo Bill," Nix said. "This move allows him the opportunity to play somewhere else if he so choses. And we felt that was a fair thing to do for a guy who has played hard for us the past nine seasons."
Nix added that Schobel was still unsure about his future.
"Our fans should know that this decision was made in the best interests of the Buffalo Bills and Aaron Schobel," he said. "We wish Aaron the best of luck in whatever he ultimately decides."
Schobel was not immediately available for comment.
On Monday, Schobel told The Associated Press that he hadn't ruled out playing one more season, adding he intended to wait a few weeks before deciding on his future. He also said the Bills told him they would release him if he reported to the team at this point.
Schobel did not participate in any team activities this offseason and was placed on the Reserve/Did Not Report list when he failed to show up for the start of training camp in suburban Rochester last week.
Nix did not detail why the team waited two days before releasing him, except to say: "We continued to evaluate the situation and feel the best way to proceed is to release Aaron."
Selected in the second round of the 2001 draft out of TCU, Schobel is a two-time Pro Bowl selection and his 78 career sacks rank second on the team behind Hall of Famer Bruce Smith.
He had four years left on a $50.5 million contract extension he signed in 2007. It's a deal that included a $2 million roster bonus he was due March 1. Schobel did not receive that money, because the payment was due on the condition he passed a physical.
The length and size of Schobel's contract would have made it difficult for the Bills to trade him, especially after he's indicated he has no intention of playing beyond this year.
Nix previously said he never had any discussions to trade Schobel and, until this week, was hoping the player would play for the Bills.
If Schobel does sign with another team, it's likely to be one close to his home outside of Houston. That would make the Texans an obvious candidate, as well as Dallas and New Orleans.
Texans coach Gary Kubiak, speaking after practice in Houston on Wednesday, called Schobel "a heck of a player" and didn't rule out the possibility of his team's interest in him.
"I've followed him for a lot of years," Kubiak said. "I think it's about right now evaluating him just like you do every player that gets released and then taking a look at your team and where you're at."
Kubiak noted that Schobel already has an obvious tie with the Texans in defensive line coach Bill Kollar, who previously coached Schobel in Buffalo.
"Bill thinks a lot of him as a player and a person," Kubiak said.
Schobel's agent, Jeff Nalley, told KIRV-TV in Houston that his client has "always been a fan of the Texans" in a story published on the station's website. Nalley, however, didn't rule out other possibilities.
"I do expect to hear from most of the Super Bowl contenders in each conference that need a pass rusher," Nalley was quoted as saying.
At 32, Schobel first discussed the possibility of retiring before the start of last season. Schobel said football was no longer fun to him, and he was growing frustrated with the Bills' failure to make the playoffs during his tenure.
Another factor was he was afraid of the toll another season would take on his body. He also wanted to spend more time with his family. Schobel began making that transition when he sold his Buffalo-home this spring and relocated to Texas.
AP Sports Writer Chris Duncan in Houston contributed to this report.