This is shocking and unfortunate news for Browns fans, who have been desperate for a winning team in Cleveland.
The loss of Hillis would be a body blow to the Browns' 2011 playoff chances and potentially set back the organization's rebuilding process.
If the Browns were to explore trading Hillis, they certainly wouldn't have any shortage of suitors.
Here are five teams that I think could and should contact the Browns this week about Hillis.
Hillis has been "the one that got away" since his rise to stardom began in Cleveland last year. The Broncos stumbled to 4-12 record while Hillis rushed for over 1,100 yards and 11 touchdowns, coupled with close to 500 yards receiving.
2011 has seen similar results.
The Broncos sit at 1-3, and Knowshon Moreno hasn't been the answer the Broncos were looking for.
Perhaps a trade of Knowshon Moreno and a fourth round pick to Cleveland for Hillis would make the most sense for both teams.
The injuries to Jamal Charles and Eric Berry have essentially ended any hope the Chiefs had in 2011.
Fans are beginning to clamor for a suck-for-luck campaign, and maybe the best thing the franchise can do is just stay calm and wait to see what kind of pick they get in the 2012 draft.
However, the Chiefs have one of the most passionate fanbases in all of football, and they would not be very happy with a 2-14 or 3-13 season.
If there is a trade to be made for Hillis, especially a trade that would keep hated rival Denver from acquiring him, then I think it makes sense for Kansas City to step up.
Hillis could be insurance for the Chiefs if Charles isn't able to return to his former self. Hillis and Charles could also form one of the more dynamic backfields in NFL history, on par with Alstott and Dunn in Tampa Bay.
If I'm Kansas City, I offer Cleveland a second and fourth round pick for Hillis.
Something about Peyton Hillis just feels like a Pittsburgh Steeler.
I think it has to do with his hard-nosed, blue collar running style.
He reminds me a lot of Jerome Bettis, and I've watched Cincinnati Bengals players bounce off him in the same way they bounced off Bettis.
The New York Giants, Carolina Panthers, Tampa Bay Buccaneers and countless other teams have proven that a two-running back system can be very productive, and I think it's exactly what this Steelers team needs to right their ship.
If I'm Pittsburgh, I would offer Cleveland Antonio Brown and a third round pick for Hillis.
The Patriots love to stockpile talent and draft picks.
They have two first round picks in the 2012 draft, and while I think that could be slightly overpaying for Hillis, I do think there is a good argument to be made for trading a late first rounder to Cleveland in exchange for Hillis and a fifth or sixth round pick.
Hillis's bruising running style could help open up the Patriots' offensive attack even more. Teams will need to bring an extra defender up to the line to help tackle Hillis, or else he will bust through to the secondary on every play.
If I'm New England, my offer is a late first round pick to Cleveland for Hillis and a sixth rounder.
How unfair would this be?
The Packers are the most dominant team in the NFL right now, but they have been very below average running the ball this year.
Adding talent like Hillis could give the Packers a chance at completing the 19-0 season the Patriots started but never finished.
If I'm Green Bay, my offer to Cleveland would be a 2012 first round pick for Hillis.