Law - scored almost 12 000 runs for Lancashire.
Stuart Law has played his last match for Lancashire and will be replaced as captain by Glen Chapple for next season.
Lancashire today announced they have not offered former Australia batsman Law a new contract - citing his allegiance to the Indian Cricket League, yet insisting too that was not a "determining factor".
Law, 40 next week, joined Lancashire from Essex six years ago as an overseas player and - after becoming qualified as an English cricketer - eventually took over the captaincy for the start of the 2008 season.
He scored almost 12,000 runs in all competitions for the Red Rose but raised eyebrows this summer with his outspoken remarks after Lancashire decided to release veteran former England all-rounder Dominic Cork.
Lancashire chief executive Jim Cumbes said: "Stuart has been a top-class player and has served us superbly in the time he has been here.
"But the club is committed to giving younger members of the squad the opportunity to grow, and the cricket committee felt the time was right for other players to take on added responsibilities."
The unofficial status of the ICL remains a problem for English counties and their employees.
As runners-up in the Twenty20 Cup, Kent qualified to play in the inaugural Indian Premier League Champions League - only to be told they would not be invited, because they had fielded players who have ICL connections.
"Although not a determining factor, any player's allegiance to the ICL does make it difficult for English counties, simply because the England and Wales Cricket Board are tightening regulations on unauthorised competitions, as are the International Cricket Council," Cumbes added.
Lancashire cricket manager Mike Watkinson has also placed on record his thanks to Law for his captaincy and prolific run-making in Lancashire colours over the years.
"Stuart was one of my very first signings when I took over as cricket manager, and has always given tremendous service to the club," he said.
"He is a quality player who takes great pride in passing on his knowledge to anyone who needs a helping hand.
"He is highly respected in the dressing room and popular with both members and supporters. We wish him and his family all the best for the future."
Seam-bowling all-rounder Chapple, 34, is currently Lancashire's longest-serving player - having made his first-class debut in 1992.
He said: "I'm absolutely delighted and very proud to be named as captain of Lancashire.
"It's a privilege to play for such a big county, and an even bigger honour to be captaining the club I've been involved with for the past 18 years.
"I'm a product of the Lancashire system - and I look forward to leading a very talented squad of players to future success."
After a 2008 season that finished with his team safely avoiding relegation from a congested Division One of the LV County Championship, Watkinson concluded: "Chappie continues to be a leading player for Lancashire and has excellent credentials to take the squad forward in 2009."