An FA Youth Cup winner with City in 2008, Ibrahim made just three senior appearances for the club.
His debut came in the FA Cup four years ago against Scunthorpe United, a club he later joined on loan ahead of further temporary spells at NEC Nijmegen in the Netherlands and Norwegian outfit Stromsgodset.
The Somalia-born Ibrahim has two caps for Norway and made his first international start in Saturday's 3-0 friendly defeat to Poland in Abu Dhabi.
However, he has been deemed surplus to requirements at City by manager Manuel Pellegrini.
A message from City's official Twitter account on Wednesday read: "The club can confirm that Abdisalam Ibrahim has been released from his contract. We wish him well for the future."
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