DiPietro, 31, has eight-years left on a 15-year, $67.5 million contract that pays him $4.5 million each season.
On June 27, a source close to the Islanders told TFP that "Rick is a likely candidate to being bought out."
DiPietro will be played on unconditional waivers on Tuesday. Once he clears, he'll be bought out and the Islanders will be responsible for paying DiPietro $24 million over the next 16 seasons ($1.5 million per year).
DiPietro was assigned to the Islanders' AHL affiliate in Bridgeport during the season, where he posted a 9-9-0 record with a 2.93 goals-against-average and an .893 save percentage.
The former first-overall draft pick in 2000 has been riddled with injuries since the 2008-09 season and have only played in 50 games since that year, including three games this past season.
DiPietro is believed to have a clean bill of health and will become an unrestricted free agent. He can sign with any team starting July 5.