Henson, who has been waiting to find out if he would return next season, only joined the French Top 14 club in February.
He recently served a one-week suspension for a nightclub brawl and reports in France suggested that the 29-year-old Wales international had paid the price for the run-in with his team-mates, sparked by critical comments he made about Jonny Wilkinson.
Toulon president Mourad Boudjellal said: "We do not want to blame anyone but, for next season, we hope that team spirit is a priority."
However, team manager Tom Whitford said: "The problem is we haven't qualified for Europe. That means our budget is going to be restricted, which means we're slightly limited in our salary budget.
"The second reason is we hope from his point of view he's going to be picked for the World Cup. That means that we're going to lose a player for a three to four month period, so we'd rather not take that risk. Obviously there was an incident - and he wasn't the only one at fault."
The decision not to keep Henson follows hot on the heels of Toulon's high-profile signing of former rugby league star Willie Mason, who is expected to play at centre.