Source have told Kelly that the Dolphins approached Grimes about restructuring his contract, but he preferred to test the open market instead.
A report earlier mentioned that the Dolphins are in trade talks with the Eagles regarding CB Byron Maxwell, who could ultimately replace Grimes, depending on how things go in the coming days.
Grimes, 32, was in the third year of his four-year, $32 million contract that included $16 million guaranteed. He was set to make a base salary of $7.8 million for the 2016 season.
According to OverTheCap.com, releasing Grimes will free up $6.5 million in available cap space while creating $3 million in dead money.
In 2015, Grimes appeared in 15 games and recorded 48 tackles, four interceptions, and 14 pass defenses.