The 33-year-old has made 17 starts this season for the Bulls in the National League North.
He signed for Hereford in July 2017 and was a part of last season’s championship winning campaign.
McGrath is expected to join another club in the division.
A statement on the club's website said: "Hereford FC can confirm that Mike McGrath has been allowed to leave Edgar Street by mutual consent, the midfielder is now free to find a new club.
"Everyone at Hereford FC would like to thank Mike for his efforts and wish him well for the future."
PHOTO BY BULLS NEWS