Ferdinand has lost his place in the United first team over the last couple of years due to a series of injuries and because of the emergence of Phil Jones, Jonny Evans and Chris Smalling.
Ferdinand's contract expires this summer and he has revealed he will not be signing an extension.
The 35-year-old former England captain will therefore leave Old Trafford although he has no desire to retire and is now looking for a new club.
In a statement on his website, Ferdinand said: "I have thought long and hard over the last few months about my future, and after 12 fantastic years playing for what I regard as the best club in the world, I have decided the time is right for me to move on."
Ferdinand moved to Old Trafford from Leeds in July 2002 for a then British record transfer fee of £29.1million, which also made him the world's most expensive defender.
He won the Premier League title in his first season at the club and went on to lift the trophy five more times in 2007, 2008, 2009, 2011 and 2013.
Ferdinand also won the Champions League in 2008 as the Reds beat Chelsea on penalties in the final in Moscow, as well as two League Cups and a Club World Cup.
His statement continued: "I joined Manchester United in the hope of winning trophies, and never in my wildest dreams could I have imagined how successful we would be during my time here.
"There have been so many highlights, playing alongside some great players who have become good friends, winning my first Premier League title and also that fantastic night in Moscow are memories that I will cherish forever.
"Circumstances didn't allow for me to say goodbye the way I would have liked but I'd like to take this opportunity to thank my team-mates, staff, the club and the fans for an unbelievable 12 years that I'll never forget. Winning trophies I dreamed about as a kid came true at this great club.
"I am feeling fit and healthy, ready for a new challenge and looking forward to whatever the future holds for me."
Ferdinand made 454 appearances for Manchester United and earned 81 caps for England before announcing his international retirement in May last year.
His partnership with Nemanja Vidic was integral to the Reds' title-winning teams in 2007, 2008 and 2009 and both were named in the PFA Team of the Year at the end of each campaign.
Ferdinand signed a one-year extension to his contract this time last year but has found first-team opportunities harder to come by this season, making just 14 Premier League appearances.
The decision to let Ferdinand go ignores the advice of interim manager Ryan Giggs, who insisted earlier this month the defender could still make a useful contribution and should be offered a new deal.
There were no hard feelings, however, as United said on their official Twitter account: "#mufc would like to thank Rio Ferdinand for his long and distinguished service, and wish him well for the future."
Former Manchester United defender Gary Neville reacted to the news of Ferdinand's departure on Twitter.
He said: "So it looks like Rio and Vida allowed to leave at once!!! A conveyor belt has become a cliff!"