The 31-year-old will depart as a free agent when his contract expires at the end of the season, having made 293 appearances since joining from Everton for 47.5 million pounds in 2016.
Stones helped City win six Premier League titles, the UEFA Champions League, two FA Cups, five League Cups, three Community Shields, the Club World Cup and the UEFA Super Cup. He was also a key part of the side that secured a historic treble in 2023, starting both the FA Cup final against Manchester United and the Champions League final against Inter Milan.
"It has been my home for the past 10 years and it will be my home for the rest of my life," Stones said in a social media post.
"It has been a rollercoaster in many ways. I came as a kid and now leaving as a man - becoming a father, a husband and, on the pitch, a very fulfilled player.
"I lived all my dreams out and lifted all the things that I came here to achieve.
"At the start of my career here I never would thought I would be in this position. Firstly, to achieve everything but to have the love, the bond with everyone. Every dream has been smashed out of the park."
Stones was Pep Guardiola's second signing after the Spaniard's arrival in 2016 and became, at the time, the world's second most expensive defender.
"I don't think it would have been anywhere near as successful without him," Stones said of Guardiola.
"I'm so grateful that I've been able to spend so long with him, win everything with him. I feel lucky and grateful for what he's done for me."
Stones' departure follows an injury-hit campaign which has limited him to just four Premier League starts. He has not started a league match since October and has made only 18 appearances in the competition since the beginning of the 2024-25 season.
The club's decision not to renew his contract is understood to have been influenced in part by his recent injury record, bringing to a close a highly successful period at the Etihad Stadium.