The influential midfielder was off-contract before Friday's announcement and leaves the Sky Blues after 119 appearances.
Brattan had been unsure about his future after playing in Sydney's semi-final loss against the Central Coast Mariners.
He has been linked with a move to Macarthur FC.
"It's not easy to say goodbye. Hopefully, it's not goodbye forever," Brattan said on Friday.
"(I'm) obviously a bit emotional. The last month or so has been a roller-coaster especially and I'm at a point now where I've sort of come to grips with it.
"The best times of my career have been here.
"It's football. Clubs go in different directions. It's part of the game.
"I think I've got a good opportunity now, moving on with my career, and I'm extremely excited about that."
The 34-year-old is a championship and premiership player with the Sky Blues, and captained them to an Australia Cup title last October.
He leaves as a one-time club player-of-the-year recipient, with two PFA Team of the Season accolades.
First-year Sydney coach Ufuk Talay thanked Brattan for his commitment.
"Luke will always be viewed as a Sydney FC hero and be well respected," Talay said.
"He has been an excellent leader during my time here and I would like to thank him for his hard work.
"Hopefully this isn't the last time we see him at Sydney FC.
"We will look to the future now and I'm excited to bring through our next generation of heroes and club captains."
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