Schurrle, 29, joined BVB from Wolfsburg in 2016 for a fee in the region of €25m.
However, he proved to be a disappointment and has spent much of his time out on loan.
It was recently reported that Dortmund were willing to sell Schurrle for just €2m.
Instead, they have reached an agreement with the attacker to tear up his contract.
Speaking upon his release, Schurrle said: “In retrospect, it was a time of ups and downs, but with many valuable experiences, both in a sporting sense and personally. I thank the BVB managers and wish the club and its special fans all the best for the future.”
Schurrle made 51 appearances in total for Dortmund, scoring eight and assisting 10 goals.