Castillo, 35, was in the final season of a four-year, $25 million contract with the Mets but was not enjoying the same numbers that helped earn him three Gold Gloves earlier in his career.
"This was baseball decision," Mets General Manager Sandy Alderson said in a statement. "I met with Terry (Manager Terry Collins) and made a recommendation to Jeff (Chief Operating Officer Jeff Wilpon) and Jeff approved on behalf of ownership.
After 15 seasons in Major League Baseball, Castillo's range at covering second base had slipped as did his batting average. He hit .235 last season after batting .302 in 2009.
He was competing with four other players for the position.
(Reporting by Gene Cherry in Salvo, North Carolina; Editing by Frank Pingue)