Having joined from rivals United less than a year ago, the injury-prone former England midfielder has been let go from the Etihad Stadium after making only four appearances
The former England international moved to the Etihad Stadium last summer after his contract at rivals Manchester United expired.
The 31-year-old made just four appearances for the newly-crowned champions in the whole of the campaign - scoring once at home to Birmingham City in the League Cup, a superb 20-yard strike.
Having struggled for fitness throughout the season, the club confirmed today on their website that the former Bayern Munich midfielder will be allowed to leave this summer.
Hargreaves has struggled for fitness over the last few seasons, having been an integral part of Manchester United's Premier League and Champions League winning campaign of 2007/08.
The Canadian-born player was forced to visit a knee specialist in America in early 2010 in a bid to cure him of persistent tendenitis problems.
Following surgery, Hargreaves made his first Premier League appearance in nearly two years as a late substitute against Sunderland, but further injury problems curtailed his comeback.
He played once more for the Red Devils in a League Cup clash with Wolves at Old Trafford in November of the same year, but was forced off in the opening 10 minutes with a hamstring complaint.
The midfielder, who has won 42 caps for England, made the switch to City last summer after being released by Sir Alex Ferguson in a bid to resurrect his career.
However, having failed to sustain his fitness levels, he has now been released by the Champions and will look to pastures new this summer.