There were several layers to this.
Going into the last year of the contract, he was scheduled to make a little over 11 Million. Since he was starting to show signs of breaking down, the Packers obviously had some concerns as to whether he would be a sound investment. I haven't heard whether or not they tried to negotiate a re-worked deal with him, but, several efforts were made to trade him and there were no takers.
Also, the Packers are going to need some freed up money on the line for Kenny Clark, who is up for a big cash in, and, also just resigned Dean Lowry.
Hate to see Mike go, but it looks like a solid financial gamble.