The 24-year-old full-back, whose two-year stay with the Rebels has been blighted by disciplinary problems, is best known to British fans for his role in the recent Lions series.
He slipped while taking what would have been a match-winning penalty in the first Test and, while dealing with the fall-out from that, must now look for a new club as well.
"Whilst Kurtley has been a valuable and popular player for the Rebels over the last two years, it is no secret that he has been facing some significant personal challenges," Rebels chief executive Rob Clarke said on his club's official website.
"The Rebels have supported him through this process and at all times have made decisions in the best interests of Kurtley's welfare.
"Kurtley will to continue his off-field program in Sydney and the Rebels believe that he should remain there supported by his family network."
Beale follows fellow Wallaby James O'Connor out of the club's exit door, with the latter having been released earlier this week.
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