After confirming that Alex Albon (24) will continue for next year and beyond, Williams said it would announce its full 2023 driver line-up in due course.
In a tweet, Latifi said of his departure: "Honoured to have represented them for the last 3 years. A massive thanks to the whole team – it’s been an incredible journey and I’ve enjoyed every second of it."
In 55 races for the team, the Canadian scored seven points and has struggled for form this year, scoring no points in 2022 and has been far off the pace set by teammate Albon.
Williams' CEO Jost Capito racing said in a statement: "He is a great team player who has a great attitude towards his colleagues and work and is well liked and respected throughout the business.
"Our time together is now coming to an end, but I know he will put full effort in to maximise what we can do together for the remainder of this season. We wish him all the very best of luck for his future, both in and out of the cockpit."
Alongside his three seasons in F1, Latifi has also competed in Formula 2, Formula 3 and Porsche Carrera Cup.