The decision clears about $2.3 million against the salary cap and comes after the Panthers failed to trade the veteran, who struggled late last season. Lucas vetoed a deal to the Detroit Lions last month.
"We had some teams approach us and we talked to some teams, and nothing worked out," Panthers general manager Marty Hurney said. "We just thought this was the time to do this. ... Ken's been a very good starter for us for four years."
Lucas was signed away from the Seattle Seahawks to a six-year, $36 million contract in 2005. He started 49 of 50 games for Carolina and had 13 interceptions.
Lucas also was known for fierce, trash-talking, one-on-one matchups with Smith in practice. That boiled over in training camp last year when Smith punched Lucas in the face while the cornerback was resting on one knee.
Panthers coach John Fox had to implore Lucas' defensive teammates not to retaliate against Smith, who was suspended for the first two regular-season games. But Lucas, who needed minor surgery on his nose, told his teammates that he forgave Smith. The issue didn't linger, and the Panthers went 12-4 and won the NFC South title.
"We've said repeatedly how much we respected how Ken handled the situation," Hurney said. "I think that it was indicative of how he handled himself the four years he was here. He's a pro, and he always was a team guy. He played at a very high level for us. Anytime you make these kind of decisions, it's very hard."
Lucas' departure likely means nickel back Richard Marshall will be promoted to the starting job opposite Chris Gamble, who signed a contract extension late last year.
"Everything works out through competition, but obviously, Richard is a former second-round pick and has been a very, very good player for us," Hurney said. "We certainly have all the confidence in the world that he can step up and help us there."
The move clears much-needed cap space for the Panthers, who must count the one-year, $16.7 million franchise-tag tender to Julius Peppers until that issue is resolved. The four-time Pro Bowl defensive end has said he wants to play for another team next season and hasn't signed the tender.
Hurney said there were no new developments with Peppers.
Copyright 2009 by The Associated Press