Mike Klis of KUSA in Denver first reported the development.
The team later announced the move.
"Even though Chad's no longer part of our team, we've offered to help him however we can and are supportive of him in every possible way."
According to a news release from the Englewood (Colo.) Police Department, Kelly stands accused of illegally entering a home before being chased out. A short time later, officers searching the area spotted a man matching the suspect's description inside a black SUV. The man, identified as Kelly, was then placed under arrest.
Kelly posted a $2,500 bond and was released from custody.
Kelly fell to the seventh round of the 2017 NFL draft due to injury and a litany of off-field issues that plagued him throughout his college career, including being dismissed from Clemson in 2014. Following an altercation outside of a Buffalo nightclub in 2014, Kelly was charged with resisting arrest, menacing, and several other counts, for which he served 50 hours of community service as part of the non-criminal charges.
Kelly's latest criminal issue ended his run in Denver.
The backup quarterback could have been weeks away from getting a shot on the field. With Case Keenum's up-and-down play to open the season, fans began to call for Kelly, who impressed during the preseason, to get a chance. Alas, the 24-year-old's off-field actions now wipe out that possible opportunity.