The move was first reported Monday by NorthJersey.com. The Giants are expected to officially announce Cruz's release later Monday, the source told Schefter.
Cruz, 30, is less than three years removed from major knee surgery and would have counted for $9.4 million against the Giants' salary cap in 2017. New York will free up $7.5 million in cap space with his release.
Cruz burst onto the scene with back-to-back 1,000-yard seasons in 2011 and 2012 but has struggled to regain that form since suffering a torn patellar tendon midway through the 2014 season. He missed the entire 2015 season and had just 39 catches for 586 yards and a touchdown this past season.
A fan favorite known for his signature "salsa dance" touchdown celebration, Cruz also saw his role diminish as he fell behind? Odell Beckham Jr. and Sterling Shepard?on the Giants' depth chart in 2016.
Cruz took a significant pay cut to return to the Giants last season. He still made $5.4 million and wanted to return to the team that signed him as an undrafted free agent out of UMass in 2010.
ESPN's Jordan Raanan contributed to this report.