The experienced midfielder who was the only remaining senior player on the books at the club has agreed a compromise deal to leave which will save them from liquidation
The new comes days after defender Tal Ben Haim, who was on a reported £36,000-a-week, agreed to leave the debt-ridden south coast outfit.
"We have negotiated a compromise agreement with Liam Lawrence, who will leave the club when the paperwork is finalised later today," read a statement on the official website
"I'd like to thank Liam for his support and all of the other players for putting the club's interest ahead of their own. They have all had to make very difficult decisions and been placed in an impossible position which wasn't of their making."
"This means that we have now successfully completed agreements with all of the first team squad and met the major condition of the offer from Portpin, which formed the basis for the CVA proposal."
Administrator Trevor Birch had set a dealine for every player to be off the wage bill by the August 10, so Lawrence's departure should help steer the club in the right direction.
During pre-season, trialists and youth team players have formed the Portsmouth team with manager Michael Appleton now looking to offer these players full-time contracts.
Portsmouth have been in administration since February 2012, and will begin life in League One with a 10 point deduction.