The 32-year-old, whose three-year stay at Old Trafford has been punctuated by injury, broke the news on Twitter on Thursday morning.
"The Manager informed me after our testimonial match on Tuesday that the club would not be offering me a new contract," Owen said.
"I have loved every minute of the three years I have spent at such a fantastic club. I would like to thank the players, staff and fans for their support and wish them well for the future.
"I now plan to have a short holiday during which I will contemplate my next move."
Owen arrived from Newcastle on a free transfer in the summer of 2009 and scored 17 goals in 52 appearances, most famously the 96th-minute winner in the Manchester derby three years ago.
He featured only four times in 2011/12 before suffering a thigh injury in November that sidelined him for the rest of the season, though he returned to the bench for the final league game at Sunderland and played in Harry Gregg's testimonial.
Manchester United thanks Michael for his contribution and wishes him well for the future.