The 27-year-old was sent out on loan to Tanzanian club Singida United at the start of the campaign after being deemed surplus to requirements by Amakhosi.
However, he cut his loan spell short towards the end of 2016 after Singida failed to pay his monthly salary on time for a number of occasions.
This despite Katsvairo scoring three goals in his first two matches for the Tanzanian outfit.
Katsvairo subsequently went back to Naturena as he still had a running contract until June 2019.
After a meeting on Friday, both parties agreed to part ways by mutual consent.
In his first season with Amakhosi, Katsvairo made 16 appearances in all competitions and found the back of the net three times.
He joined the Glamour Boys alongside Edmore Chirambadare, who continues to struggle for game time this season.
Chiefs can still add a foreign international to their ranks for the remainder of the campaign as they still have a single spot available in their quota.
The Soweto giants are currently assessing Nigerian forward Kelvin Abara Obasi, who is a free agent.
As things stand, no decision has been made regarding the future of the 21-year-old marksman.
The arrival of Leonardo Castro from Mamelodi Sundowns seemingly ended any hopes of Katsvairo possibly returning to the club on a permanent basis.
Castro was also handed the shirt number (No.8) which Katsvairo used prior to his departure to Singida.
Katsvairo has already been linked with a possible move to Baroka FC, although none of the parties involved has confirmed the reports.