The 28-year-old has been told he can find himself a new club either this transfer window or the next by manager Brian McDermott.
January signings Daniel Carrico and Hope Akpan have seen Tabb drop down in the pecking order, despite being a regular early on in the season.
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"I had an honest chat with the gaffer, he pulled me in and said I'm probably not needed any more and if something comes up in January I can go or wait until the end of the season on a free," Tabb told The Reading Chronicle.
"It was a totally friendly conversation, we shook hands.
"I've played 12 or 13 games this season and done pretty well. Obviously the club signed two more midfielders and without a new contract offer it was kind of expected, the writing was on the wall.
"It's one of those things and I said to him I'm here until the end of the season if needed he can rely on me."
But Tabb, who has made 105 appearances for the club since arriving from Coventry City in 2009, admits he will leave with a heavy heart.
"It happens in football, you can't stay forever," he added. "Of course I wanted to stay but you can't force clubs to keep you.
"Like I say, it's one of those things and I'm sure if I move in January the club will wish me well and I will wish the club well.
"The fans have been great to me, the same with the players. If I'm needed before the end of the season they can rely on me."
Elsewhere at the Madejski Stadium, Noel Hunt is set to open talks to extend his contract at the club as his current deal runs out this summer, while veteran striker Jason Roberts is also interested in a contract extension.