The Blues academy product held a meeting with manager Roy Keane this morning where he was told that he was surplus to requirements at the club and would be allowed to seek a footballing future elsewhere.
Richards is the eighth player to be released since the end of the season, with the others being Ivan Campo, Tommy Miller, Dean Bowditch, Billy Clarke, Chris Casement, Jai Reason and Kurt Robinson.
Alex Bruce has signed a new deal, Shane Supple and Ed Upson have been offered new deals whilst Liam Trotter and Dan Harding are likely to hear if they are in Keane's plans for next season in the coming days.
Click here for a player profile on Matt Richards