The person spoke on condition of anonymity because no announcement was made.
By releasing Bailey, the Broncos would open up cap space with the 12-time Pro Bowl player scheduled to make around $10 million next season.
Bailey was sidelined most of the season by a nagging left foot sprain. The 35-year-old shutdown corner returned late in the season to help the Broncos advance to the Super Bowl, where they lost 43-8 to Seattle.
Bailey was acquired in 2004 by the Broncos in a deal that sent running back Clinton Portis to the Washington Redskins.
A message was left with Bailey’s agent.