The 32-year-old's contract expired yesterday and she wants to explore other opportunities.
Her decision brings to an end a second spell at Blues.
Williams rejoined the Club for the 2017 Spring Series and scored eight goals on her return.
A cruciate ligament injury ruled her out of the 2018/19 season but Williams made her comeback in September, after 13 months on the sidelines.
Williams made 42 appearances for Blues since rejoining and overall played 94 times, netting 43 goals.
A talismanic forward who was a key figure on and off the pitch, Williams lifted the FA Cup with Blues in 2012.
Everyone at Blues would like to thank Rachel for her service to the Club.
We wish her the best of luck for the future.