Houston, who was drafted by the organization in 2011, has been released, a source told The Star on Sunday.
By parting ways with Houston, the Chiefs will save $14 million in cap space, while still carrying $7.1 million in dead money.
Houston's future with the team has been in doubt since general manager Brett Veach said the team was engaging in trade talks with teams about the 30-year-old edge rusher at the NFL Combine.
"Justin Houston is a great player," Veach said in Indianapolis. "Our deal is to obviously acquire and maintain as many great players as you can. I think this time of year I'm no different than any other GM standing on the podium. There's 32 teams here, and every coach is here, every personnel member is here and we're staying in the same hotel, so there's a lot of dialogue.
"I think right now we're just in the process of collecting information and working with what we have, and then leave here and get together again and discuss and see what we can do to make our team better."
Ultimately, the Chiefs decided the best way to make the team better was by parting ways with Houston.
Though Houston is coming off a solid season where he recorded 36 total tackles, nine sacks and one interception, his hefty contract and age significantly diminished his trade value. Houston signed a six-year, $101 million contract in 2015.
Houston, a Georgia product, spent his entire eight-year NFL career to this point in Kansas City after being taken by the organization in the third round of the 2011 draft.
He put together his best season in 2014 when he earned an All-Pro nod for a monster 22-sack season to go with 68 tackles and four forced fumbles.
A quiet leader in the locker room, Houston was a key motivator through the Chiefs' most recent playoff run.
After beating the Raiders in the regular season finale, Houston jumped in the center of the team huddle and growled a fiery speech to his teammates.
"Every time, all the time you got, dog, please put it in this dog," he said then.
"We've only got three weeks to give it all we got. That's all brother. You've got the rest of the offseason to do whatever you want, brother. You've got three weeks to give it all you've got. All your time dedicated to this. Let's go get this thing, dog. Let's go get this."
Houston backed up his words with a strong performance in the divisional-round win against the Colts, coming up with two sacks, a fumble recovery and a deflected pass.
"Justin's been a big part of this organization since I've been here," fellow pass rusher Dee Ford said before the playoffs. "He's just been that voice that you sort of need to hear at times. That's just the makeup of our team. He's done a phenomenal job leading us and it hasn't been easy for him either, especially coming off of an injury midseason. For him to still able to have that presence around us, we're all enjoying it right now."
With Houston's departure, the Chiefs still have a premium pass rusher on the roster in Ford, who was franchise tagged earlier this month. But Ford's future in Kansas City isn't certain, either. Ford's spot in Steve Spagnuolo's 4-3 defense isn't solidified, the Chiefs are listening to trade offers for the 27-year-old linebacker.
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