Dortmund’s sporting director Michael Zorc made the announcement on Saturday.
Gotze, 27, has made 201 appearances over two spells with Bundesliga, but he has only started five league games this season.
He has won five Bundesliga titles (two at Dortmund and Bayern Munich) and scored the winner for Germany in the 1-0 win against Argentina at the 2014 World Cup final in Brazil.
“We will part ways with Mario this summer. It was a mutual and respectful decision. He’s a great man,” said Zorc.
The decision comes just days after Dortmund manager Lucien Favre said Gotze does not fit his current system.
“Right now, we are playing 3-4-3,” Favre told the media before Saturday’s Bundesliga match with Wolfsburg.
“So, I have been talking to Mario, and unfortunately this is not the right system for him. You must say the truth about this.”
Gotze started on the bench in Saturday’s 2-0 away win against Wolfsburg.
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