Cohen refused to play for the Saints after being overlooked for the captaincy and has not attended a training session since mid-August.
Northampton insisted they would not terminate Cohen's contract, which still had one year left to run, when he effectively went on strike.
But a deal has now been agreed between Cohen and Northampton which allows the England winger to move elsewhere.
Saints chief executive Allan Robson said: "Ben was under contract until the end of this season so we have obviously had extensive discussions to fully understand his situation.
"The result is that we have reached a position which we feel is in the interests of both the club and the player.
"The club has agreed an early release, Ben has made a payment honouring the remainder of his contract and we are parting on the best of terms."
Cohen, who made his Northampton debut in 1996, wanted to captain the Saints in their push for an immediate return to the Guinness Premiership.
When new director of rugby Jim Mallinder appointed New Zealand full-back Bruce Reihana as skipper, Cohen informed club chairman Keith Barwell he intended to leave.
Barwell explained: "Ben came to see me and said he was unhappy about not being appointed captain. He said: 'That's it, I'm off'."
Both sides seemed intent on drawing a line under the row, with Barwell thanking Cohen for 14 years of service and wishing him luck for the future.
Cohen said: "My career at the Saints been very special, especially winning the Heineken Cup in 2000, reaching three Twickenham cup finals and two Premiership play-offs.
"I have many friends at the club and it will always have a special place in my heart.
"I am grateful to the Saints for the opportunities they have given me and I wish the club all the best for their promotion campaign and the years to come.
"I would also like to thank the supporters. They've always been there for me and I will miss them."
Cohen made 270 appearances for Northampton and was a member of the 2000 Heineken Cup-winning side.
In May, Cohen withdrew from England's World Cup training squad in May in order to spend more time with his wife, Abby, who is expecting twins.
He has previously been linked with a move to Northampton's rivals Leicester.