The PNG international joined the Cowboys from the Dragons on a three-year-deal starting in 2019 but played just five games for the club before having his season ended by a horrific ankle injury.
In a statement, the Cowboys said the release was granted by mutual agreement, “with the club, Nene and his management deciding Nene needs some time away from the game”.
The club said it would provide Macdonald with ongoing support.
The announcement comes less than a month after Macdonald was involved in a traffic incident on Magnetic Island.
A hire car leased in Macdonald's name was found abandoned and damaged on June 20. In a statement at the time, the club said it was aware of the incident and would be making no further comment. The matter remains under investigation.