The veteran defender, 38, is out of contract at Bramall Lane and will not be offered a new deal. He joins John Lundstram Simon Moore and Jack Rodwell in leaving the club when their current deals expire this summer.
Jagielka came through the academy at Blades and rejoined his boyhood club in the summer of 2019 following 12 years at Everton.
He made 22 appearances, primarily as a substitute, after his return, with his most recent as an 83rd-minute replacement for Ben Osborn during the home win against Burnley on the final day of the 2020/21 season in front of Blades supporters.
Midfielder Lundstram leaves after turning down the offer of several new contracts, while goalkeeper Moore and midfielder Rodwell did not make a single appearance last season as United were relegated from the Premier League.
Defender Kean Bryan is the only out-of-contract player to be offered a new deal. Ethan Ampadu has returned to Chelsea following his loan spell.