LATEST NEWS: Henry leaves Peterborough United
The club will not trigger a two-year option they had on the 19 year-old after he requested the chance to find a new club.
Henry was a graduate of the Posh Academy, but made just one appearance as a substitute for the first team in a home game against Millwall in October, 2015.
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Hide AdHenry has had trials at Crystal Palace and Leicester. He spent part of last season on loan at Boston United.
Posh director of football Barry Fry said: “Dion approached us and said he wanted regular first-team football. He’s not going to get that here so we agreed not to take up the option of two extra years on his contract.”
Posh signed former Birmingham goalkeeper Josh Tibbetts last week. He is expected to be the number two Posh goalkeeper. Posh are still trying to re-sign Luke McGee from Spurs.