At a press conference today Panthers General Manager Phil Gould told the media Lewis felt stale and needed a new challenge.
Lewis, 30, has reportedly been unhappy since he was stripped of the Panthers captaincy by coach Ivan Cleary.
Gould told reporters the mutual decision was made at a meeting between with Lewis and his manager this morning.
“At this meeting Luke has indicated he is at the stage of his career where he is feeling stale and as such is looking for a new outlook and challenge in his life,” said Gould.
“Luke feels as though he has given the Panthers all he can, but at this stage of his career he feels he needs a change of environment to achieve his goals.
“Luke has requested the club give consideration to releasing him from the final two years of his contract so he can pursue opportunities elsewhere.”
Lewis, who was contracted to the club until the end of 2014, will leave at the end of the year, was given a glowing endorsement by Gould.
“Luke has given the Panthers outstanding service over the past eleven years,” he added.
“Luke is a tremendous success story and a perfect role model for youngsters growing up here in Western Sydney. Luke rose from the Penrith Junior league to play in the NRL, captain his club, play for his state and play for his country.
“Luke has always been, and will always be, a very valuable member of the Panthers.”