Botica faces a long lay-off after breaking a leg playing for the Warriors a month ago.
The Wigan chairman, Jack Robinson, said the decision not to renew Botica's contract was taken reluctantly and that the directors wanted to keep faith with the club's younger players.
"We are very sorry to lose Frano. He has been a great servant to the club," Robinson said.
"Frano said we had to give him a quick decision which put us on the spot and that was the decision we made. I phoned him to tell him and it was one of the toughest phone calls I have had to make. Frano was obviously very disappointed.
"I consider him to be a good friend, but at the end of the day, we've got to make decisions which we feel are in the best interests of the club.
"He is a great all-round player and one of the greatest players we have had at Wigan. It is probably the end of an era with him going."
Botica holds two club records with Wigan: most goals in a season (186 in 1994-95) and most points in a season (423 in 1992-93).
The former All Black also broke the points (20) and goals (10) records for a Premiership final, achieving the feat twice - in 1992 and 1995 - as well as scoring the most goals and points in a Regal Trophy final (eight and 20 earlier this year). In March 1993, he reached the fastest 1,000- point mark in rugby league history.
The Kiwi Test player's glittering career with Wigan included five championships, five Challenge Cups, three Premierships and two Regal Trophy victories.
It is perhaps fitting that, in what turned out to be his last season in cherry and white, Wigan completed the first Grand Slam of modern times.