Graham, 31, signed with Sounders FC on January 21, 2009 after spending three seasons (2005, 2007-08) with the USL-1 Sounders.
"We want to thank Taylor for all of his contributions to the Sounders and the Seattle community," said Sounders FC head coach Sigi Schmid. "He has been a Sounder for many years and will always have a special place in the hearts of our supporters."
"It's always tough to say goodbye to something that I've been doing for so long," said Graham. "I love Seattle and I love the Sounders, but I'm ready for the next step in my life."