Speaking to the Official Foxes website, Levein confirmed: "On behalf of everyone connected with Leicester City Football Club I would like to thank James for his loyal service to the club over the last four years.
"He is a model professional, has contributed greatly to this club and we wish him every success for the future."
Scowcroft will now be free to look for another club, although a move to Town on a full-time basis looks unlikely with the 29 year old striker not having impressed since joining the club on loan.