Palace have announced the decision today.
Chairman Steve Parish praised the south London-born talisman, saying: "Personally I can't thank Jason enough for his contribution to our club. He has been inspirational to his team-mates both on and off the pitch, and is a true leader. It's not an overstatement to say we would not be entering our seventh successive season in the top flight without him.
"I sincerely believe that this will not be the end for Punch and Palace, when his playing days come to an end. He will always be welcome at Selhurst Park, and should leave extremely proud of his contribution to his local club."
Puncheon himself expressed his gratitude to everyone at the club and his pride at his time here, saying: "It's been an honour and a privilege to have represented my hometown club and I leave with memories that will stay with me forever.
"I would like to thank everyone at Palace; in particular all of my teammates and the managers and coaches I've played under. Thank you to all of the amazing backroom staff, including the medical team for your relentless work in helping me back from injury, Danny the Kitman, Christine our club secretary and all of the fantastic kitchen staff for everything you've done for me during my time at Selhurst Park.
"A special thank you to the Chairman Steve Parish, who has always been a huge figure of support for me throughout my time here. Steve has the very best interests of the club at heart and I thank him for everything he's done.
"I cannot leave without a mention to our fans. The love and support you've always shown me through thick and thin will stay with me forever. It's meant everything. Thank you for always believing in me and this great club.
"To have had the honour of captaining the club, my club, the club I supported as a boy, will always remain with me as one of my proudest achievements. I've loved every minute of my time at Palace and would like to wish everyone at the club, and our amazing fans, all of the very best for the future."
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