Parker, who was drafted at No. 1 in 2008, is an unrestricted free agent. Free-agent players can begin signing with their new teams on Monday.
While the Sparks did try to retain the reigning Defensive Player of the Yearwho helped them win the WNBA title in 2016, the opportunity to return to her hometown of Chicago and play in front of friends and family for the last portion of her career was too appealing for her to pass up.
Parker, 34, played in all 22 of the Sparks' games in the 2020 season and finished third in MVP voting.
The 6-foot-4 forward is the only player in league history to win MVP and Rookie of the Year honors in the same season (2008).
She also was WNBA MVP in 2013 and Finals MVP in 2016. For her career, Parker has averaged 16.9 points and 8.6 rebounds.
Parker won two NCAA national championships while at Tennessee, in 2007 and 2008.
Another key member of the Sparks, forward Nneka Ogwumike, has agreed to a multiyear deal to remain with the team, a league source told ESPN's Mechelle Voepel.
Ogwumike, the 2016 season MVP and president of the players' union executive committee, was given the core designation by the Sparks, which is similar to the franchise tag in the NFL.
What made Candace Parker choose the Chicago Sky?
Ramona Shelburne says the Sky players and front office talked Candace Parker into coming to play in front of her hometown in Chicago.