Ryan won the Masterton Trophy, the NHL's award for perseverance, on Sept. 7 after publicly sharing his struggle with alcohol issues. The 33-year-old forward entered the NHL/NHL Players' Assistance program on Nov. 20 to get help for his addiction issues.
Ryan had two years left on his contract at a $7.25 million cap hit and was owed $15 million in real cash. Buying out the contract will save the Senators $3.67 million in cap space in each of the next two seasons, but add a cap charge of $1.83 million in each of the following two years.
"This was a decision that required a lot of consideration," Senators general manager Pierre Dorion said in a statement. "Bobby's long been a deserving fan [favorite] in Ottawa. While we're appreciative of his efforts on the ice, it's outweighed by how proud we are of him for the courage that he has demonstrated off of it. As we continue to take strides in our rebuild, this decision was one that we felt was best for the organization. We wish he and his family the best as he moves forward."
Ryan had five goals and eight points in 24 games for Ottawa this season. He has 254 goals and 301 assists in 883 games in 13 NHL seasons with the Anaheim Ducks and Ottawa. He was drafted second overall by Anaheim in 2005.
Information from The Associated Press was used in this report.