He caught 15 passes for 181 yards and no touchdowns, never appearing to fit into the 49ers' offense.
"I was released today by the 49ers due to my injury that required more time to rehab and hasn't allowed me to re-sync with the offense," Edwards said in a statement on Tuesday. "I wish the 49ers organization the best of luck during the playoffs. I will be working hard this offseason to strengthen my knee and prepare for the 2012 season. Thanks for your continued support and for being such loyal fans."
Edwards has had some off-field issues in recent years.
In 2010, he was charged with DWI after his blood alcohol level registered twice the legal limit. Then in August of this year, he was implicated for his role in a fight that broke out at a bar in Birmingham, Mich.
Edwards had 15 catches for 181 yards and no touchdowns in eight games with five starts for the NFC West champion 49ers (12-3) after receiving a $3.5 million, one-year contract in August. That gave him a fresh start under coach and fellow Michigan man Jim Harbaugh.
He was inactive against the St. Louis Rams on Dec. 4 and again for the Monday night game against the Pittsburgh Steelers. In a loss at Arizona on Dec. 11, Edwards had no catches and expressed his surprise not to be used more in the offense.
Harbaugh has said Edwards' performance in games and practice affected his playing time.
San Francisco had been eager to see Edwards' big-play ability when the club acquired him — Harbaugh liked his size at 6-foot-3 and 214 pounds — but it never happened. That lack of production became a bigger deal after the team lost Joshua Morgan to a season-ending leg injury Oct. 9 against Tampa Bay. Morgan underwent surgery to have pins inserted in a broken bone in his lower right leg.
Edwards spent the first five seasons of his NFL career with the Browns, making the Pro Bowl in 2007, before playing the past two with the New York Jets.
Edwards made 53 receptions for 904 yards and seven touchdowns last season for the Jets and was determined to build on that with his new team. Then the injury delayed his progress.
Edwards made it clear when he discussed the shoulder injury that he hadn't returned to full speed or full strength since the knee injury.
''I'm playing through a football season. No one is ever going to be fully healthy, but just fighting every day,'' he said. ''Injury means you can't play, but I do have a shoulder ailment, I'll say. Little bit of AC joint. Nothing super serious, but at the same time, it's nagging. It bothers me.''
Last Tuesday, after a commanding 20-3 Monday night win over Pittsburgh, tight end Vernon Davis tweeted his support of Edwards and later said he was trying to step up as a leader.
''Thankful to have OfficialBraylon on my team. He's a true professional and football is very important to him,'' Davis wrote. ''I think teammates should stick together. At the end of the day we will still be as one when the coaches are gone!''
The Associated Press contributed to this report.
For more coverage of the NFL, go to profootball.scout.com.