McLaren announced on Wednesday that they had 'mutually agreed' to part ways with the 33-year-old Aussie driver, one year before his contract was due to expire.
Despite saying it was mutual, McLaren and Ricciardo both made it clear that it was the team's decision.
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McLaren said they will confirm their driver line-up for the 2023 season "in due course", but it has been an open secret that fellow Aussie Oscar Piastri - a Formula 2 champion and Alpine reserve driver - will step in for the eight-time race winner Ricciardo.
McLaren have been unhappy with Ricciardo's performances, especially compared to those of his British teammate Lando Norris, who is under contract until the end of 2025.
Ricciardo has been a third of a second slower than Norris in qualifying all season, with the Briton currently seventh in the championship and five places higher than the Aussie in 12th. Norris has 76 points to Ricciardo's 19.
McLaren team principal Andreas Seidl conceded: "There was a contract and it needed mutual agreement to terminate it early, but after discussion with Daniel we felt it was the right thing for both sides to split ways for next year.
"If you look back at the last 18 months of our journey together, Daniel and McLaren, it's clear we haven't achieved the result we wanted, despite highlights like the great win in Monza last year.
"That's why we had a lot of discussions but in the end we had to acknowledge we did not make it work together despite the commitment that was there from Daniel's side and all the effort the team has put in.
"And that's why we came to the agreement we would terminate the contract at the end of this year.
"It's not the outcome we wanted but we want to put in all the effort to finish the relationship on a high."
McLaren will be forced to hand Ricciardo a payout for terminating his contract early, which could reportedly be as much as $24 million.
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Ricciardo said he was proud of his time at McLaren, but made it clear he was determined to continue his career in F1.
There have already been reports that Haas boss Gunther Steiner has made offers to Ricciardo to join the US-based team.
"Regardless of what this next chapter brings, I have no regrets and am proud of the effort and work I gave McLaren, especially the win in Monza, last season," Ricciardo said.
"I will be giving my all on and off track as we enjoy the remainder of the season together.
"I've never been more motivated to compete and be a part of a sport that I love so much and look forward to what comes next."
McLaren team bosses admitted they'd been surprised the link-up with Ricciardo had not produced better results after he came over from Renault in 2021.
Seidl admitted: "He said it himself - we simply didn't manage as a team to make him feel fully comfortable in the car, especially when it came to going to the absolute limit in qualifying.
"We tried a lot but unfortunately we didn't make it work."
McLaren chief executive Zak Brown described it as a "sad day" for the team.
"Daniel's a wonderful person, and a great person to be around. We've had many laughs and we've sprayed champagne together. It's very personal," Brown said.
"Today is a sad day that things didn't work out as we'd hoped they would.
"I'm going to look back with some very fond memories, some fun times together on and off the track. We're in a business...we need to focus on ultimate performance and we wish Daniel the best."
Earlier this month, Alpine announced Piastri would be racing for them next season, only for the Australian to say he wouldn't after he'd reportedly already agreed on a deal with McLaren.
If this is the end of Ricciardo’s F1 career, at least we have this photo 📸💦 pic.twitter.com/8fx9aU5EBc
— ESPN F1 (@ESPNF1) August 24, 2022
What a ride @danielricciardo. From that moment in Monza, to the laughs we've had out of the car, it's been a joy working with you these last two years. Whatever’s next I wish you all the best, let's have a mega next few months pic.twitter.com/V0F5oQylpb
— Lando Norris (@LandoNorris) August 24, 2022
Hope Daniel Ricciardo ends up back at Alpine as rumored. Would be excellent for the sport. Him not having a seat would be pretty damn awful for F1
— Brady Klopfer (@BradyKlopferNBA) August 24, 2022
i’m so sad daniel ricciardo deserves BETTER this has unfolded in the worse way possible
— jodie ✧ (@popt4rtts) August 24, 2022
Sad for Ricciardo, but it's probably best for both parties. He wasn't performing for McLaren and the car didn't suit his style. Hopefully he can do better elsewhere
— Evan (@ArcTrooperWolf) August 24, 2022
Ricciardo leaving mclaren it’s a sad day
— Luke 🇳🇬 (@NorrisSZN__) August 24, 2022
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