Canucks general manager Jim Benning confirmed the decision in an announcement on the team's official Twitter account. Virtanen cleared waivers Monday morning, putting him one step closer to the buyout by Vancouver.
Virtanen was placed on leave on May 1 after being accused in a lawsuit of sexually assaulting a women four years earlier. The organization said at the time that it "does not accept sexual misconduct of any kind and the claims as reported are being treated very seriously."
The suit, filed in British Columbia, alleges Virtanen took the woman to a hotel in West Vancouver in September 2017 and assaulted her as she repeatedly said no and pleaded with him to stop.
The Canucks said at the time they had "engaged external expertise" to assist in an independent investigation. The NHL said then it would not comment until the investigation was complete.
The Canucks are on the hook for paying a third of Virtanen's remaining $3 million base salary, while freeing up $2.5 million in cap space.
Virtanen, 24, had five goals in 38 games last season, a year after scoring a career-high 18 goals in 69 games. Overall, Vancouver's 2014 first-round draft pick has 55 goals and 100 points in 317 games.
The Associated Press contributed to this report.