Barring a one-season stay with Crystal Palace in the 2016/2017 campaign, Mandanda had been with Marseille since 2007, when he initially joined on loan from Le Havre.
Mandanda made a club record 613 appearances for Marseille across his two spells, winning one Ligue 1 title, three Coupe de la Ligues and two Trophee des Champions trophies.
The 37-year-old still had two years remaining on his contract at the Stade Velodrome but lost his position to Pau Lopez in goal last season, making just nine appearances in Ligue 1.
"Olympique de Marseille and Steve Mandanda have decided to separate by mutual agreement," read a statement on the club's website.
"OM would like to sincerely thank Steve for everything he has brought to the club since 2007. With 613 games in the Olympian jersey, he has unquestionably become an Olympian legend.
"The club wishes him the best for the future."
Mandanda has won 34 caps for the France national team and made one appearance when Didier Deschamps' side won the 2018 FIFA World Cup in Russia.
