James' representatives told the Cavs on Friday, said the people who spoke to the Associated Press on condition of anonymity because the team is not publicly commenting on moves ahead of free agency opening Sunday.
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The move was expected by the three-time champion, who played in his eighth straight NBA Finals this past season.
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The 33-year-old will now decide if he's going to leave the Cavs for the second time in eight years. In 2010, he bolted for Miami and spent four seasons with the Heat, winning two titles, before returning home to Northeast Ohio.
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James said he'll factor family into his next choice and there's still a chance he'll re-sign with the Cavs, who were swept by Golden State in this year's Finals.