Former Shropshire captain Oliver, 25, was a late starter in county cricket when Worcestershire brought him in initially as a T20 player in May 2014.
After signing a deal to the end of the 2015 season, he initially scored well in Championship cricket in 2014, making 558 runs in seven matches.
But he has lost his place this summer and was offered only a year extension.
He made only 452 runs at an average of 21.52 in 12 matches - having averaged 39.85 in 2014 - and was dropped for the final four games of the season as Worcestershire suffered relegation from Division One in the County Championship.
Oliver has again headed down under to spend the winter months playing and coaching with Victoria state side Geelong, where has has long established ties.
But the free-spirited, strokeplaying batsman would be free to take up any offer from another county if he returns to England for next season.
Worcestershire opening batsman Richard Oliver has left New Road after turning down a new one-year contract offer.