Kelly joined Palace in summer 2014 and made 148 appearances during his time, helping to secure a 10th-place finish in his first season and scoring the game’s only goal in an FA Cup win over Tottenham Hotspur that led to the 2016 final.
He leaves as one of the longest-serving members of the squad, with only Joel Ward and Wilfried Zaha ahead of him.
Commenting on Kelly’s commitment, Chairman Steve Parish said: "Martin has shown a unique level of dedication while serving Crystal Palace. From his earlier seasons with us that established the club in the Premier League to his role as a senior, leading member of the squad, he has given no less than his all to this club in whatever position he was asked to play.
“We’ve had some big, important wins against some big teams with Martin in the team and he’s made a massive contribution to where we are today. He leaves with the very best wishes of everybody here."
Kelly himself said: "Although the last couple of seasons have been frustrating not playing as much as I'd like to, I've always tried to be professional and help the lads off the pitch as well as on the pitch, and to help the younger lads coming through. I've tried to find ways to make my worth in the squad whether I've played or not.
"I've always kept myself ready and as fit as possible for when the chances came, and I leave on a positive from the club because they gave me the chance over the past eight seasons to play for such a big side in London. They will be forever in the memories of me and my family, and we'll always be part of Palace."
Everyone at Crystal Palace would like to express their gratitude for Martin’s efforts, and wish him the very best for the future.