The move by the Rockies, who had a 10 p.m. MT deadline to pick up his $2.5 million option for 2011, saves the club money and gives them flexibility in finding another catcher to share the duties with Chris Iannetta.
About 10 minutes before the deadline, Toronto declined the option, which had a $500,000 buyout. That made Olivo a free agent.
Olivo, 32, hit a career-best .269 with 14 homers and 58 RBIs as the Rockies' primary catcher last season, but he faded in the second half, when he hit just .193 with three home runs and 16 RBIs.
The Rockies also declined their $7 million option on left-hander Jeff Francis, whom they might try to bring back at a significantly reduced price.