The defender joined Hibs in 2014 from Bristol City and made 100 appearances for the Easter Road side over three and a half years, scoring four goals and occasionally captaining the side.
Fontaine was part of the Scottish Cup winning squad, playing 70 minutes of the final before making way for Liam Henderson, and helped Hibs win promotion to the Scottish Premiership last season.
His contract was due to run out in the summer.
Fontaine featured for Hibs in the side’s winter break friendly against Dutch side Willem II, but hasn’t played any league games this season due to a seven-month injury lay-off and fierce competition in cenral defence from Efe Ambrose, Paul Hanlon, Darren McGregor and Ryan Porteous. His last competitive matches for Hibs came in the Betfred Cup during the summer.
The 32-year-old had been due to play for the Hibs development squad in their match yesterday, but he was removed from the team after the Staggies registered an interest in signing the player.
A statement on the Hibs website read: “We wish Liam well with his future career.”