The 35-year-old moved to the United States in July 2012 after eight years at Everton, signing a contract which was due to run until the end of the 2015 season.
The Red Bulls announced Cahill’s departure on Twitter, quoting the player as saying: “I’ve enjoyed every moment of my time at the Red Bulls and leave with great memories."
The announcement has sparked speculation that the player could be on his way back to the Barclays Premier League, where he became a firm favourite during a Goodison Park stint which saw him turn out 278 times for David Moyes' Toffees.
Cahill is the Socceroos’ all-time leading scorer with 39 goals in 82 appearances and helped his national team secure a maiden Asian Cup title with a 2-1 extra-time victory over South Korea in the final on Saturday.
The former Millwall man has also reportedly attracted interest from China, the United Arab Emirates and Qatar, and as a free agent does not face the time pressure to sign for anyone in England before the deadline passes at 11pm on Monday night.
Australian newspaper the Sydney Morning Herald reports that Cahill has been offered a one-year deal by Chinese club Shanghai Shenhua, thought to be worth €3 million.
Shanghai Shenhua previously attracted Didier Drogba and Nicolas Anelka to the club.
Cahill produced 14 goals and 10 assists in 62 regular-season games since joining the Red Bulls from Everton in July 2012, but notched just two goals in 22 regular-season games last season and was frequently relegated to the Red Bulls’ bench.
However, former Red Bulls teammate Thierry Henry told Sky Sports News he believed Cahill could still do a job for somebody in the Premier League.
“It’s kind of weird to be honest. Everyone thought he would stay there for another year. We have a payer who can still do something in the Premier league. Harry if you’re listening...
“I played with that guy. I still think it can happen. He’s definitely not going to hurt you. I think he can help with his presence in the box. He’s a fighter.”