Leach, a nine-year veteran, earned Pro Bowl honors in both of his two seasons with the Ravens while helping the team produce the most points and second-most yards per game in team history last season.
General manager Ozzie Newsome indicated that Leach could return to Baltimore if he doesn't find the contract he seeks elsewhere.
"We've had lots of discussion in the past week with Vonta and his agent, and both parties agreed that it was best to terminate Vonta's contract," general manager Ozzie Newsome said in a statement. "He played a significant role in helping us get to the AFC Championship game in 2011 and win the Super Bowl last season. He added to our toughness and will to win, plus he provided leadership. He's a good football player.
"There could be an opportunity for him to return to the Ravens once he explores the free agent market, and we could re-visit this before or during training camp."
Leach recorded 21 rushing attempts for 67 yards and one touchdown, adding 36 catches for 212 yards over the last two seasons.
Bajema returns to the team as he enters his ninth NFL season. He appeared in eight regular season games (one start) and all four playoff contests with the Ravens last season. Though he did not record a catch last season, the veteran served as a blocking tight end in run situations.
Bajema, a 6-foot-4, 259-pounder, has posted 38 catches for 398 yards and two touchdowns in his career with the Rams (2009-11) and 49ers (2005-08).