Caniggia leaves Gers
The 36-year-old forward has been a success at Ibrox since moving from Dundee, and has been an influential member of Alex McLeish's successful squad.
The Argentinian scored in the dramatic final day victory over Dunfermline that handed Gers the SPL title, but missed out on the Scottish Cup triumph over his former club Dundee due to a back injury.
McLeish knows he has to change his squad around and must remove players off the wage bill to bring in new faces, and Caniggia joins Arthur Numan out of the exit door.
"Following discussions with Claudio we have decided not to offer him a new contract," Gers director of football Martin Bain told the club's website.
"There is no doubt that Claudio was a great servant to the club and his stylish play was a key ingredient in the success we have achieved in recent times.
"Since his transfer from Dundee he has been a great professional for the club.
"However, it has been decided that our relationship with him will end and we wish him every success in the future."
Caniggia's age is the major factor in the decision but the veteran does have a number of offers to consider during the summer, with the most likely being a switch to Qatar.