The 49ers made the decision to part ways with McDonald amid a police investigation into an alleged sexual assault.
Authorities from the San Jose Police Department were notified late on Tuesday by an area hospital that a woman, who was seeking treatment, claimed to have been sexually assaulted a day prior.
Detectives searched McDonald's San Jose home, though no arrests or charges have been made at this stage.
"We as an organization have notified [McDonald] and his agent that he will be terminated, released immediately," 49ers general manager Trent Baalke said.
The latest allegation proved to be the last straw for the 49ers after the 30-year-old avoided domestic abuse charges in November.
McDonald was arrested on August 31 for allegedly assaulting his pregnant fiancee at his 30th birthday party, though he was left off due to insufficient evidence.
"While this organization has a strong belief in due process and has demonstrated that over time, Ray has demonstrated a pattern of poor decision-making that has led to multiple distractions for this organization and this football team that can no longer be tolerated."
McDonald had been based in San Francisco since 2007, when he was selected by the 49ers in the 2007 draft.
He won the National Football Conference (NFC) with the 49ers in 2012.