"The front office has been informed of my desire to explore opportunities with other NFL teams following the expiration of my contract next month," Peppers said in a statement released by his agent, Carl Carey. "At this point in my NFL career, I am seeking new challenges that will allow me to grow, develop and reach my personal potential on the football field.
"I strongly feel that making a move at this time is in my best interest. I appreciate the entire Panthers organization and am thankful for the seven seasons I've spent with the team."
The Panthers would have to pay Peppers, 28, nearly $17 million to franchise him for the 2009 season. Peppers has been in Carolina his entire career.
"Julius is firm in his decision that he needs a change," Carey said. "He feels that he can thrive in another system. While he has been selected to four Pro Bowls and designated as an All-Pro during his career, he feels that he has yet to develop to his full potential. This is the case of a great player who seeks to become an elite one."
The Panthers used the franchise tag this season on starting left tackle Jordan Gross, who'll also become an unrestricted free agent and command a large contract, leaving the Panthers' with salary-cap concerns.
Panthers general manager Marty Hurney, who was informed of Peppers' decision in a meeting with Carey in Houston on Thursday, did not return phone calls Saturday but released a statement through a team spokesman.
"Obviously, Carl's comments are disappointing," Hurney said. "We have consistently reiterated to Carl in a number of ways how much we value Julius and we plan to continue having ongoing communications."
If the Panthers franchised Peppers, another team could sign him only by giving Carolina two first-round draft picks in return.
Peppers, the No. 2 overall pick in the 2002 draft, became a starter upon his arrival in Carolina. The 6-foot-7 Peppers reached the Pro Bowl three consecutive years (2004-06) before he had an awful 2007 season, where he recorded only 2½ sacks.
The Panthers moved Peppers from left defensive end to the right side this season. His big numbers returned and he was picked for the Pro Bowl again. However, Peppers was held to two tackles and no sacks in the Panthers' shocking 33-13 NFC divisional playoff loss to Arizona last weekend.
Senior NFL analyst Chris Mortensen and The Associated Press contributed to this report.