The Thunder said Leonard "will not be reporting to Oklahoma City and will not be an active member of the organization."
The 29-year-old center is out for the season after undergoing shoulder surgery in February.
Leonard was banned from Heat team activities for one week and fined $50,000 after using an anti-Semitic slur during a Call of Duty stream on March 8. While playing the game, he called another player a "f--king k--e b---h."
Leonard apologized and said he was ignorant about the slur's "history and how offensive it is to the Jewish community," noting his ignorance was "absolutely not an excuse and I was just wrong."
His use of the slur came amid a rise in anti-Semitism in the United States. The Anti-Defamation League reported acts of anti-Semitism began to increase in 2016 after dropping for almost 15 years. In 2019, the ADL recorded the highest number of acts of anti-Semitism across the U.S. since it began documenting incidents in 1979.
Leonard is due to earn $9.4 million this season and has a $10.2 million player option for 2021-22.
Ariza has yet to make an appearance this season. However, Miami announced on Twitter that it is hopeful he will be available to play this weekend:
The Thunder acquired the 35-year-old forward in November, and his eventual departure was almost immediately inevitable. Oklahoma City is slowly starting its rebuild, so an aging wing on an expiring contract had more value as a trade asset than as a regular member of the rotation.
Ariza's best days are clearly behind him, but he averaged eight points and 4.6 rebounds while shooting 37.2 percent from three-point territory with the Sacramento Kings and Portland Trail Blazers in 2019-20. He also finished 22nd among small forwards in ESPN.com's defensive real plus-minus (plus-0.71).
Ariza will provide nice depth off the bench for the Heat in the second half and postseason.