The Super Rugby franchise, which replaced head coach Damien Hill with the former Munster and Wallabies assistant Tony McGahan earlier in the week, stood by Beale throughout a troubled season, but have finally had enough.
As much as his off-the-field antics have proved a constant source of worry this year - he punched skipper Gareth Delve in South Africa and twice went into rehab after alcohol-fuelled incidents - the fact the franchise has lost so much money in its first few seasons is bound to be another factor in the decisions to axe two of Australia's most talented backs.
"Whilst Kurtley has been a valuable and popular player for the Rebels over the last two years, it is no secret that he has been facing some significant personal challenges," said Rebels chief executive Rob Clarke.
"The Rebels have supported him through this process and at all times have made decisions in the best interests of Kurtley's welfare. He will continue his off-field programme in Sydney and the Rebels believe that he should remain there supported by his family network."
Beale has been linked to a return to the Waratahs, from where he joined the Rebels last year, and their coach, Michael Cheika, is a well known admirer of the 24-year-old utility back.