Anthony, a 10-time All-Star forward, will part ways with the team after playing only 10 regular-season games.
"After much internal discussion, the Rockets will be parting ways with Carmelo Anthony and we are working toward a resolution," Rockets general manager Daryl Morey said in a statement. "Carmelo had a tremendous approach during his time with the Rockets and accepted every role head coach Mike D'Antoni gave him. The fit we envisioned when Carmelo chose to sign with the Rockets has not materialized, therefore we thought it was best to move on as any other outcome would have been unfair to him."
Sources told ESPN the Rockets have no plans to immediately waive Anthony and will continue to allow his representatives to survey the marketplace for a landing spot, which has been an ongoing process in recent days.
Because he signed with the Rockets as a free agent this summer, Anthony is not eligible to be traded until after the Dec. 15 trade restriction. So any potential deal would be at least a month away.
Anthony's wisest course of action could be exercising patience and allowing changes in current team rosters -- through trades or injuries -- to create more options for him.
Anthony's $2.4 million veteran's minimum salary could be claimed on waivers, or should he clear waivers he will be eligible to sign with a team.
Anthony, 34, left the team last Friday, after the Rockets decided that his role would be minimized and no longer considered him as a part of their plans. D'Antoni has assigned much of Anthony's playing time to rookie Gary Clark. Anthony had been hopeful to continue with the Rockets, with whom he signed over the summer for the chance to compete for a title.
"It is what it is," Chris Paul said. "I think for Melo, it's all about just him being happy. Wherever that is and whatever's next, he's going to figure it out."
D'Antoni and Morey have both emphasized that Anthony has fulfilled every obligation and responsibility asked of him since joining the team.
"In the summer, we tried to hit a home run. It didn't work out," D'Antoni said Thursday. "He tried everything he could. He was great while he was here. It just didn't work out for whatever reason. I just thank him for his professionalism."
Anthony came off the bench in eight of his 10 games with the Rockets after starting every game of his career until this season.
Asked what was different about Anthony's role than what was initially envisioned, D'Antoni said: "We just had to see how things worked out. It wasn't conducive to his game.
"He was trying to make the necessary sacrifices, and it wasn't fair to him as a Hall of Fame player to play in a role that wasn't good for him," the coach said. "... We did it, we tried it, both parties wanted it to happen, and it didn't happen. Now we're moving on."
Cain: 76ers shouldn't be interested in Melo
Will Cain reacts to the news that Carmelo Anthony's time in Houston is done, according to Adrian Wojnarowski.