The Scottish champions have confirmed they have parted company with the Danish midfielder.
He returned to former club Everton on loan last season but failed to win a permanent move to Goodison.
Gravesen was given a surprise start in a pre-season friendly against Manchester City but was not involved in either SPL game against St Mirren and Dundee United.
A statement on the club's official website, celtifc.net, read: "Celtic Football Club, Thomas Gravesen and Thomas's representatives have agreed that he will part company with the club.
"Thomas wishes Celtic every success and, likewise, the club wishes Thomas all the very best for the future."