"We've got to face the facts. Martin is in the latter years of his career and earns a lot of money at this club," Freedman said.
"I feel the best thing for the club is to bring in some new, young blood," he told BBC Radio Manchester.
"That's where we are and I hope everybody understands that decision."
Petrov joined Wanderers from Manchester City in the summer of 2010 and has made 85 appearances for the club, scoring 12 goals.