Carlaw, 30, joined the Dragons from Brisbane in 2008 and played 71 Super League games, scoring eight tries.
However, he informed the club of his desire to return home for family reasons with one year left of his contract.
The Australian said: “I am very disapointed to leave the club and not respecting my contract until his end. But this decision is the best for my family and myself. It is difficult to live far from your family. I loved my time at the Dragons and livng in South of France. My son was born here. I would like to thanks Bernard Guasch and all the employees and directors of the club for their strong support. I will never forget it.”
CEO Christophe Jouffret said: “Dane is a player who was very appreciated by the whole club, from the supporters to the sponsors. He was involved in the club and community and we wish him all the best for his future. But life goes on and we have to look at further now. 2011 will be a very important year for the club and we have to focus on this news season now.”