Rondo had a team option worth more than $13 million that would have become fully guaranteed had the Bulls not waived him by Friday's deadline.
As it stands, the Bulls are on the hook for a $3 million guarantee still owed to Rondo. But they cleared more roster space for younger point guards Kris Dunn, Jerian Grant and Cameron Payne to get more minutes next season as the Bulls begin the rebuilding process after dealing All-Star swingman Jimmy Butler to the Minnesota Timberwolves on draft night.
Chicago was trying to include Rondo in potential deals before the deadline, a source said, but nothing ever materialized.
Rondo, 31, had plenty of ups and downs during his only year with the Bulls. After helping his new team get off to a solid start in November, Rondo struggled to find his form alongside ball-dominant players like Dwyane Wade and Butler. He was benched for five straight games in late December and early January and didn't re-enter the starting lineup until mid-March.
Rondo averaged 7.8 points and 6.7 assists last season, well below his career averages of 10.7 points and 8.5 assists per game.
Rondo invigorated the Bulls' push into the final playoff spot in the Eastern Conference and was a key cog in the team's surprising 2-0 series lead over the Boston Celtics in the first round. But a thumb fracture in Game 2 and ongoing wrist injuries derailed his season. He wouldn't play again, and the Bulls couldn't win without him on the floor.
Rondo was suspended for one game in early December for conduct detrimental to the team after a verbal altercation of assistant coach Jim Boylen, which included towel-whipping Boylen in the face.
Aside from that incident, Rondo was praised by coaches, teammates and executives for his professional approach. He was lauded throughout the organization for the leadership he exhibited toward younger players on the roster. Those bonds strengthened in late January, after Rondo took to Instagram to rip Wade and Butler for how they called out younger players in the wake of a loss to the Atlanta Hawks a night earlier.
"My vets would never go to the media. They would come to the team. ... My goal is to pass what I learned along. The young guys work. They show up. They don't deserve blame. If anything is questionable, it's the leadership," Rondo wrote in part of his message on Instagram.
Wade made it clear on Friday that the two have moved past any problems they once had.
Also on Friday, the Bulls announced they have waived guard Isaiah Canaan, who appeared in 39 games this season and averaged 4.6 points per game.