Williams missed last season because of a torn labrum in his shoulder suffered in training camp that required surgery.
"Tyrell just couldn't, unfortunately, stay healthy," Raiders coach Jon Gruden said at the time. "He could have potentially tried to play through it with a harness. But when you have that much restricted movement, it's hard to catch the ball away from your body."
Williams isn't fully healthy yet, so the Raiders need to wait until the new league year begins March 17 to release him for salary-cap purposes. The team will save $11.6 million with the move, increasing the likelihood that Las Vegas could pursue retaining receiver Nelson Agholor, who took advantage of Williams' absence.
Agholor had a breakout season for the Raiders with 48 catches for a career-high 896 yards and eight touchdowns after signing a one-year free-agent deal worth more than $1.04 million. The Raiders have also drafted three receivers in the past two years in Hunter Renfrow (fifth round in 2019), Henry Ruggs III (No. 12 overall in 2020) and Bryan Edwards (third round in 2020).
Williams, meanwhile, signed a four-year, $44.4 million contract that included $22 million guaranteed with the Raiders as a free agent in 2019, the same spring they traded for Antonio Brown, who was cut by the team before ever playing a game. All the guaranteed money has been paid out in Williams' contract.
Williams, who will turn 29 on Friday, had 42 catches for 651 yards and six touchdowns for the Raiders in 2019. But plantar fasciitis in both feet slowed him and he missed two games. He reported to training camp healthy before suffering the shoulder injury.
"I'm excited," he said at the time. "I feel fast, feel back to myself. So, glad to feel that way, finally kind of past that."
He spent the first four seasons of his career with the Chargers and had 155 receptions for 2,530 yards and 17 touchdowns in 55 games. His best season came in 2016 when he had 69 receptions for 1,059 yards and seven touchdowns.
The news that Williams will be released was first reported by NFL Network.