Oakland had until January 17 to exercise Cable's contract option for two years and $5 million but decided to cut ties.
Cable had just led the Raiders to an 8-8 season record that is the franchise's best mark since 2002.
He took over as the interim coach for the fired Lane Kiffin in 2008 and posted a mark of 17-27 during his tenure.
A popular figure among the players, Cable's departure came as a surprise to some of the Raiders.
"It's definitely a step back from what we've done going forward the last year or two."
(Writing by Jahmal Corner in Los Angeles; Editing by John O'Brien)