LeBron spent eight campaigns with the Lakers, where he won a title in 2020. He has been heavily linked to the Golden State Warriors, who are also said to want Washington Wizards big man and LeBron's former Los Angeles teammate, Anthony Davis.
Despite the 17-time champions' desire to keep him, LeBron informed the Lakers that he would be looking for a new franchise.
"LeBron James is one of the greatest athletes in history. We will always be thankful for his eight years with the Lakers - including the title he led us to in 2020 under the toughest imaginable circumstances and the countless records he broke in purple and gold," said Lakers governor Jeanie Buss.
"We wish him all the best in the future, both on the court and off. He will always be a cherished part of the Lakers family."
The Lakers suffered a 4-0 defeat to the Oklahoma City Thunder in the Western Conference play-off semi-finals last season, and were dumped out of the first round in back-to-back years prior to that.
At 41, LeBron wants to play for a team that can compete for the title.
A four-time NBA champion, LeBron averaged 20.9 points per game, 7.2 assists and 6.1 rebounds during the regular season, while shooting 51.5 per cent from the field.
However, his record 21-year All-NBA run came to a halt as he played in just 60 games due to injury - five fewer than the required mark needed to be eligible.
The NBA free agency negotiating window gets underway on Wednesday.