Wings general manager Ken Holland told The Detroit News and the Detroit Free Press that he met with the 47-year-old and Chelios wouldn't be offered another contract.
The Associated Press left a message for Holland Monday evening seeking comment.
Holland tells the News it was "kind of understood last summer" when Chelios signed a one-year deal that it would be his last.
Holland says Chelios wants to play another season and believes the veteran player can still play.
Detroit acquired Chelios from Chicago in 1999, and Holland calls him "just a perfect role model for young players."
He had no points and was a plus-1 rating in 28 games this season.
In 25 NHL seasons, Chelios has 185 goals and 763 assists in 1,644 games. He scored 21 goals with 131 assist in 578 games over 9 1/2 seasons with the Wings.
DRW.com editor Bill Roose contributed to this report.