Muhammad will become a unrestricted free agent upon the official announcement of his release, as he was not included in the NFL's personnel notice for Friday.
His release will result in a cap space clearance of $3.964 million, with only $500,000 in dead money.
Muhammad was selected by the Saints in the sixth round of the 2017 draft and played in four games during his rookie season. He later found a home with the Colts in 2018, where he appeared in 65 games with 25 starts over the course of four seasons.
During the offseason, the Bears signed Muhammad to a two-year, $10 million contract, but his performance fell short, as he only made 29 tackles, one sack, and a forced fumble in 16 games. He participated in 608 defensive snaps and 42 on special teams.