The decision comes just weeks after Leonard received surgery on a partially torn ACL that could potentially keep him out all of next season.
Still, declining his player option doesn't come as a surprise because the small-forward is now eligible for a four-year, $176-million max contract or a one-plus-one which would allow him to sign a five-year, $235-million deal with the Clippers in 2022.
Leonard, 29, last entered free agency in 2019 when he left the Toronto Raptors to join Los Angeles. He averaged 24.8 points, 6.5 rebounds and 5.2 assists last season.
The two-time Finals MVP missed the final eight Clippers playoff games due to his ACL injury. Los Angeles lost to the Phoenix Suns in the Western Conference Finals.