The Ghana international joined Villarreal on a free transfer last year following his exit from Arsenal, signing a one-year deal that included a clause allowing the club to extend his stay by another 12 months.
According to reports from The Athletic and Sport, Villarreal have chosen not to activate that extension option, meaning Partey will officially be without a club at the end of June.
The 32-year-old made 32 appearances across all competitions during his single season in Spain, helping Villarreal secure a strong third-place finish in La Liga.
Despite those performances, the decision comes amid an ongoing legal process involving the player in the United Kingdom, where he has been charged with seven counts of rape and one count of sexual assault.
Partey has pleaded not guilty to all charges, with his trial scheduled for June 2027.
When Villarreal completed the signing last year, the move drew significant criticism, prompting club president Fernando Roig to defend the decision at the time.
"The player finds himself in a legal process, he maintains his innocence and denies the accusations. It is for the British justice system to determine what happened. At the moment, Partey is as innocent as the rest of us here. Respecting the presumption of innocence is a fundamental value at Villarreal."
Reports have also suggested that some players within the Villarreal dressing room had previously expressed reservations about having Partey as a team-mate, adding further complication to his time at the club.
Beyond his situation at club level, Partey is currently facing additional difficulties on the international stage with Ghana.
The Black Stars are competing at the World Cup this summer, but their vice-captain was excluded entirely from the squad's opening match due to travel restrictions linked to his bail conditions.
A subsequent appeal to overturn the travel ban was dismissed earlier this week, confirming his continued absence from involvement in the tournament.
Partey will now have to search for a new club as a free agent while continuing to manage the legal proceedings against him, with his immediate focus remaining on Ghana's World Cup campaign despite the restrictions limiting his participation.
Finding a new club is expected to prove difficult given the circumstances, with prospective suitors likely to weigh reputational considerations alongside his playing qualities before making any decision, particularly given the scheduled timing of his trial next year.