The former West Ham star still had a year left on his contract with OM, but will now depart after being offered the opportunity to retire and move into an executive role.
Between pausing to wipe away his tears, the 36-year-old former France international explained his departure was 'unexpected' and revealed he would like to continue playing.
Where that will be remains unclear, but Payet promised to clarify his situation in the coming days.
Speaking at an emotional press conference with president Pablo Longoria, the club executive appeared a little sheepish as Payet admitted he wanted to stay.
"We had a discussion well before the resumption of training and Pablo Longoria spoke honestly," Payet said.
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"It is not easy to digest but I think it has the merit of being honest, this was not expected on my side.
"I would like to continue playing football. I am coming out of a very difficult season with little playing time. I want to play, to find pleasure on the pitch, quite simply.
He continued: "The club offered me, if I stopped today, a retraining. But I still have pleasure to give in football.
"We made progress on my post-career and on joining the club at the end of my career and my end of career will be marked by my return here."
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Longoria, on his part, had opened the press conference by saying: "We have decided not to continue the adventure with our captain.
"But Dimitri, if I have to define you in two words, it's genius and talent. You have given a lot of pleasure to our supporters and to everyone in football."