The Angels will pay the remainder of Madson's $3.5 million base salary for 2013, but because he never took the mound, they saved on the performance bonuses that totaled an extra $3.5 million.
Madson isn't expected to return to the Majors in 2013, so releasing him now eases some workload off the Angels' medical department.
"Our medical team has spent much time, effort and resource in the effort to facilitate a healthy return," said Angels general manager Jerry Dipoto, who obtained Madson on a one-year, incentive-laden deal in November. "It's been a long and difficult process for all involved. I spoke to Ryan earlier today and informed him of our decision. This was an upside gamble that I deemed worth the risk and unfortunately it did not transpire for either Ryan or the club."
Madson got as far as a rehab appearance for Class A Inland Empire on May 13, only to be shut down again with lingering pain in his right elbow. For about a month, he had been rehabbing at the Angels complex in Tempe, Ariz., occasionally throwing bullpen sessions but never able to progress far enough to throw at full intensity or be cleared for another rehab assignment.
Armed with one of the game's best changeups, Madson was among the most productive late-inning relievers in baseball while with the Phillies from 2007-11, posting a 2.89 ERA while averaging 62 games per season and saving 32 games that final year.
He signed a one-year, $8.5 million deal with the Reds in January 2012 -- after a much larger contract with the Phillies reportedly fell through -- but was forced to undergo Tommy John surgery on April 11 of that year.
Now, it looks like he'll miss a second full season.
"It certainly wasn't Ryan's plan to not pitch two years in succession; it certainly wasn't our plan," Dipoto said. "We've gone through every possible form of rehab -- medical advice, medical health, he's been to visit specialists in New York and Phoenix and Florida. He's covered the globe, and we're continuing to try and help him today. He's gone through a long rehab -- an unexpectedly long rehab -- and to that point, it's very disappointing to Ryan, and I know it's very disappointing to us."
Alden Gonzalez is a reporter for MLB.com. Read his blog, Gonzo and "The Show", and follow him on Twitter @Alden_Gonzalez. This story was not subject to the approval of Major League Baseball or its clubs.