Chancellor was placed on the reserve/physically unable to perform list, the team announced.
The Seahawks also announced they waived McDowell under the non-football injury designation.
Chancellor announced on July 1 he was done with football. However, NFL Network's Ian Rapoport noted it wasn't an official retirement, but the four-time Pro Bowler wouldn't be medically cleared to play due to neck injuries and his total base salary of $11.4 million over the next two years was guaranteed.
Per Bob Condotta of the Seattle Times, Chancellor would have given up the money owed to him if he officially retired. The Seahawks' move on Thursday officially ends the 30-year-old's 2018 season but also keeps him on the 90-man roster.
After being selected by the Seahawks in the second round of the 2017 NFL draft, McDowell was involved in an ATV accident last July. He didn't appear in a game during his rookie season after being placed on the non-football injury list.
NFL Network's Mike Garafolo told the Real Hawk Talk podcast (via 247Sports' Derek Lewis) in August 2017 that a good resolution for McDowell would be finding a way to play in the NFL at all due to the serious facial fractures he suffered after the accident.