The Goodison Park club have also announced that former Wolves defender Ruben Vinagre will return to Sporting Lisbon after an injury-impacted loan spell on Merseyside.
Coady made 25 appearances for Everton this season, including a start in Sunday’s vital 1-0 win over Bournemouth which secured safety, and scored two goals.
Coady, capped 10 times by England, joined the Toffees last August in a deal which included an option to buy, but that option has now expired.
Vinagre made only four appearances in all competitions.
Everton director of football Kevin Thelwell said: “We want to sincerely thank Conor and Ruben for their impeccable professionalism and valuable contributions both on and off the pitch during their time with the club.
“We wish both players the best in their futures.”