The Yankees will owe Gaudin, who turned 27 on Wednesday, one-quarter of his $2.95 million salary for this season. He is free to sign with any team.
"I'm disappointed," Gaudin said. "I enjoyed every minute with these guys. Unfortunately, our roads are going different ways. I wish I could have stayed longer."
Gaudin, acquired from the Padres last Aug. 7, pitched in four Spring Training games and allowed 10 runs (nine of them earned) on 16 hits in 9 1/3 innings. His ERA was 8.68.
"It is what it is," Gaudin said. "I can't change the past, I can only create a future."
Yankees general manager Brian Cashman said that it was becoming clear that Gaudin was on the outside looking in to be the fifth starter, a job that was handed to Phil Hughes on Thursday.
Cashman said that he was looking for trade opportunities but found none, and that it was "not realistic" to consider sending Gaudin to Triple-A. He noted that he remains happy with the trade for Gaudin last season.
"He helped us win a World Series," Cashman said. "He helped us stabilize, and he was a nice addition for us. I was glad he joined us last year, and he was a part of something special.
"He'll be a part of that forever, but as we move forward, we've got to make tough decisions on what 2010 is going to be like and who's going to play a role. Today I let him know, and he'll obviously find his way with someone else."
Gaudin said that he was not shocked by the decision. He shook hands with several of his teammates before jumping on a cell phone near his locker, studying the fine print of an in-house memorandum.
"To be honest with you, I'm not surprised with anything anymore," Gaudin said. "This is going to be my seventh team, hopefully. I got released last year in the spring [by the Cubs] and look where I ended up. I'm sure I'll land with some other team and help some ballclub win. That's all you can do."
Bombers bits: CC Sabathia pitched in a Triple-A game Thursday against the Phillies' top Minor League club in Tampa, Fla., allowing seven runs on seven hits in 3 2/3 innings. Sabathia walked one, struck out four, hit a batter and allowed two homers in the 88-pitch outing. ... Cashman said that Marcus Thames continues to compete for a roster spot as a right-handed-hitting outfielder. "I know that our people believe that he can help us," Cashman said. ... The Yankees are still considering carrying left-handers Boone Logan or Royce Ring on the Opening Day roster.
Bryan Hoch is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.