Miller - who also played for both Rangers and Celtic - signed with the Caps as a Designated Player in July 2012, and has gone on to score 13 goals in 43 appearances.
Entering the league with the reputation as a Premier League player - with spells at Derby and Wolves highlights in his career - was a cause for celebration for Caps fans, and, although the 34-year old has featured in all nine of their games this season - including seven as a starter - his poor goal-scoring return means his contract termination comes as no surprise to many.
As a Designated Player, the owner of the club is required to pay any salary remaining after the charge to the salary cap, meaning that revenue can be lost when a player is performing below the level required of him.
A statement on the official club site read: 'Vancouver Whitecaps FC announced today that the club has parted ways with striker Kenny Miller. The club and Miller have mutually agreed to a contract termination.'
Head coach Carl Robinson was quoted in the same statement as saying: "We are thankful for the contributions Kenny made both on and off the pitch during his time in Vancouver.
"He has been a great role model, a constant professional, and someone who I consider a very good friend. We wish him and his family all the best.”
In the wake of his announcement, Miller has denied rumours circulating that he has already penned a deal for a return to Rangers. As the Ibrox club prepare for next season's league campaign, manager Ally McCoist has revealed his desire to sign the former club favourite.
Meanwhile, Miller's departure leaves Vancouver with an open Designated Player spot, with the current MLS transfer window closing on May 12.