Speaking to Chris Biderman of the Sacramento Bee, Sherman said it's "been made pretty clear" to him in talks with head coach Kyle Shanahan and general manager John Lynch that the 49ers won't be re-signing him.
"It was a good conversation, nothing crazy. Just a good conversation about where they are and where I am, and their plans. We were both very positive and as good as you can be in a situation like this," the five-time Pro Bowler added.
Sherman has been open about his future with San Francisco dating back to the 2020 regular season. He told Matt Maiocco of NBC Sports Bay Area in December that it was "not looking likely" for the two sides to continue their partnership.
There are practical reasons for the 49ers to look for other options at cornerback. They currently project to have $20.45 million in cap space this offseason with key players like Trent Williams, Jason Verrett and Kyle Juszczyk also eligible for free agency.
As things currently stand, Jimmie Ward is the only member of San Francisco's starting secondary last season under contract in 2021. Sherman, Verrett, K'Waun Williams and Jaquiski Tartt are all set to become unrestricted free agents in March.
While Sherman was a key member of San Francisco's defensive success in 2019—he was named to the All-Pro second team and Pro Bowl—injuries limited him to just five games last season and he will turn 33 on March 30.
The 49ers signed Sherman to a three-year contract in March 2018 after he played seven seasons with the Seattle Seahawks. The Stanford alum started 34 games over the past three years and helped San Francisco reach the Super Bowl in 2019.