Armstead, who went undrafted out of USC after suffering a heart attack in 2011, missed last season after developing an infection following a surgery unrelated to his heart.
"It has been a pleasure being around Armond, as he gave everything he could to play for us," New England coach Bill Belichick said in statement released by the team. "Armond worked extremely hard since joining us last February. He's had a lot of adversity personally that he's had to deal with -- unusual compared to most other players -- but he's always had a great attitude, worked hard and really did everything we asked him to do.
"While it is unfortunate he will not be able to play football, Armond is an outstanding young man who has a very bright future in whatever path he chooses."
Armstead helped lead the Argonauts to the Grey Cup in his lone season there. Argonauts general manager Jim Barker told ESPNBoston.com last year it wasn't "very often that an NFL team can get a first-round pick without using a first-round pick."
A disappointing turn of events.