However, that does not preclude the possibility that the Lions will re-sign Palmer. Rather, it means that Palmer will no longer be a restricted free agent when free agency begins on March 13.
The move makes sense for the Lions, who will be up against the salary cap next season. They can't afford to tender a reserve linebacker at more than $1 million.
That certainly doesn't mean the Lions can't come to a free agent deal with Palmer for him to remain a Lion. Palmer knows the system and was very good on special teams last season.
It's not unlike the situation the Lions went through with running back Kevin Smith when they didn't tender him a contract offer last offseason.
The 25 year-old linebacker played primarily on special teams for the Lions in 2011, finishing the season with eight tackles. Palmer was signed by the Bills as an undrafted free agent after the 2009 draft. The Bills waived him in 2010, leading to the Lions' claim for him.
The Lions will also have decisions to make on fellow restricted free agents linebacker DeAndre Levy, defensive tackle Sammie Hill, and offensive tackle Corey Hilliard, all of whom are expected to be tendered offers.
For more on the Lions, head over to SB Nation's Detroit Lions blog, Pride Of Detroit.