Adam Schefter of ESPN reported the update Tuesday.
ESPN's Todd Archer noted the transaction, which won't be announced Tuesday, will save Dallas $5 million in cap room for 2019 once it does become official.
Hurns signed a two-year, $12 million contract with the Cowboys last March.
The 27-year-old Miami native made a limited impact in his first season with the team. He recorded 20 catches for 295 yards and two touchdowns across 16 games. He added one reception for 14 yards in a playoff victory over the Seattle Seahawks before suffering the gruesome injury.
Last month, Hurns told Kate Hairopoulos of the Dallas Morning News he was back to about 90 percent health when he returned to the field for minicamp.
"My main thing is to get healthy, put together a great training camp and go from there," he said.
He tallied 189 catches for 2,669 yards and 21 touchdowns in four seasons with the Jags. His best season came in 2015 when he put up 64 receptions for 1,031 yards and 10 scores.
The 6'3", 201-pound perimeter threat has never been able to match that production, however, and it's unclear whether his playmaking talent will fully return after a major injury.
That said, his track record should earn him an opportunity elsewhere and the Cowboys' decision to release him now gives him a better chance to fight for a 53-man roster spot with another team during training camp and the preseason.