The 40-year-old, who signed on a free transfer in 2008 from Middlesbrough, had been offered a new contract but turned it down.
Schwarzer, the first overseas player to make 500 top-flight appearances, is one of a number of players confirmed by the club as being released.
Others include Northern Ireland defender Chris Baird, 31, who signed from Southampton in 2007, plus Greek midfielder Giorgos Karagounis and Croatian striker Mladen Petric both after only one season at Craven Cottage.
Another departure is former Wales international Simon Davies, a key member of Fulham's run to the 2010 Europa League final.
Davies, 33, who signed from Everton in 2007, scored a memorable equalising goal in the final against eventual winners Atletico Madrid.
Other departures include Hungarian keeper Csaba Somogyi, manager Martin Jol's first signing two years ago, plus development squad players Alex Smith, James Musa, Richard Peniket, Tom Donegan and Corey Gameiro.