The Northern Ireland U19 international is just 18 and has a contract at the club until June 2005, however blues boss Joe Royle feels he has not progressed in the manner the club would like, and has handed the young forward a free.
"Sam has not progressed as much as we would have liked and we have decided to give him a free transfer," Royle told the Official Club Website on Friday Afternoon.
Morrow has made just one substitute apperance for the club, against Notts County in the Carling Cup earlier this season.