The 34 year old only signed for the Championship side in the summer of 2011 following his release by Reading but has struggled for first team oppportunities, managing just a handful this season.
Manager Paul Jewell commented on the news, "It's not worked out for Ivar here and he doesn't want to hang around if he is not going to be involved."
The former Icelandic international is now free to find a new club.
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