The 35-year-old, who played a starring role in Australia's triumphant Asian Cup campaign, had a year to run on his $4.52 million contract with the Major League Soccer franchise, but has decided to embrace a new challenge rather than stay in the USA.
“I’ve enjoyed every moment of my time at the Red Bulls and leave with great memories,” said Cahill.
“I joined with the ambition of helping to grow and positively affect soccer in the US and I feel immensely proud of what we achieved as a team during my time in the MLS.
“Winning the Supporter’s Shield was without doubt one of the best moments I have experienced in my career and I am now looking forward to my next chapter, of which I will announce in due course.”
Cahill joined New York from Everton in 2012, having enjoyed a highly successful spell in the Premier League with the Toffees.
Speaking at a press conference in Sydney on Tuesday, Cahill revealed that he had considered a number of different avenues before heading to China.
"I've been on the phone to (former Everton manager and Real Sociedad boss) David Moyes, I spoke with (former Arsenal and New York star) Thierry Henry and also the chairman Bill Kenright at Everton and (Socceroos coach) Ange (Postecoglou) this morning," he said.
"I've made the decision purely because I've played in the Premier League and did really well and it was a massive compliment to get the phone calls I did last night and to speak to Moyes about possibly going to La Liga.
"I've done the Premier League, I've done America. New York was amazing for me … (but) China is a growing market in football.
"You see in the (Asian Cup quarter-final) game that we played against China, millions of people watched it and I'm someone who is embracing culture and a different aspect of life.
"I'm at an age where I want to give something back to football and still play at a high level.
" … it's all about doing what I want to do as footballer and trying different leagues and I think it's exciting.
"To still be in demand and have the offers I've had is special but this will be massive for me as a player on and off the park."
The former Millwall player added that he considered a move home to the A-League, but that no concrete opportunities came his way and as such he has decided to head to the Chinese Super League.
"I respect Australian football so much (but) I've never have had an official offer in the last two months," he told Fox Sports.
"I'll make an impact in China on the pitch, I promise you.
"When I go somewhere I'll do it properly.
"I'm at an age where I want to give back to football as well as play at a high level."