The news comes a day after the 32-year-old was left off of the Blues' 22-man squad for the Champions League.
Clearly upset by the decision, Malouda tweeted a picture of Chelsea's U-21 training facility with the message, "This is where I'll train for my last season with the blues !!!"
The French midfielder made 42 appearances for the club last year, eight of which came in the Blues' run to the Champions League trophy. However, he was only able to provide three goals and seven assists throughout all competitions. That is the lowest number of goals Malouda has provided in his time at Stamford Bridge and the lowest number of appearances since his first season.
Malouda has been a key cog in the Chelsea squad since he transferred from Lyon in 2007 for a reported £13.5 million. He played a vital part in the Blues' 2009 FA Cup Final victory and was one of the standouts of the 2009-10 Premier League season.
However, the influx of young, creative midfielders at the Bridge this transfer window makes the potential contributions of Malouda obsolete.
It will be a shame to see Malouda's imminent departure from Chelsea be on imperfect terms, but the likes of Eden Hazard and Oscar makes the Frenchman's place on the squad impractical.
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