"Wayne has made it clear to me that he is looking for first-team football," Royle told the club's website.
"But with Chris Makin showing his ability as a central defender it was felt that it would be better to offer the lad a free transfer.
"Wayne is a lovely lad, a great character and is at a point in his career where he needs regular football.
"I am sure he will find a club ready to take him on and everyone at Ipswich Town wishes him all the best."