The Englishman, 25, moved to Rugby Park in 2015 from Partick Thistle and made 34 first-team appearances for Killie.
"As well as his solid defending, Balatoni was known for his ability to create and even score goals from the back, netting three in total," Kilmarnock said on their website.
"Everyone at the club would like to wish Conrad the best of luck in the future."
Defender Conrad Balatoni has left Kilmarnock by mutual agreement.