A native of Marlborough, Mass., Butler appeared in 94 games over the past three NHL campaigns with Ottawa, tallying 37 points (16 goals, 21 assists) and 22 penalty minutes. He was held scoreless in three postseason contests during Ottawa's first-round loss to the New York Rangers.
Butler, 25, was signed by the Senators on March 29, 2010, after completing his collegiate career with the University of New Hampshire.
The Ottawa Citizen reports the cost of the buyout is $400,000, paid to Butler in $200,000 installments over the next two years. Citing CapGeek.com, it says Butler's salary-cap charge will be $50,000 next season and $200,000 in 2013-14.