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Titans boss Graham Annesley confirmed the cross-code star had requested a release from the final year of his NRL contract on Thursday.
Hayne had been heavily linked with a return to Sydney for a number of weeks to be near his NSW-based daughter and his former club.
"He basically wanted to go back to western Sydney," Annesley said on Thursday.
"Obviously his home and his heart is in western Sydney. That's where his family connections are. That's where he'd prefer to be.
"I'm of the view that you can have contracts but you need to have people's hearts and minds involved and if Jarryd decided that's the best thing for him, we were willing to accommodate."
The 29-year-old's departure comes just six months after he activated an extension clause with the Titans for 2018, which caused a flurry of speculation about an Eels return.
It also brings to an end a dramatic 15-month stay at the Titans, which included a well-publicised feud with Neil Henry that resulted in the coach being sacked midway through last season.
Asked if he was relieved Hayne was leaving, Annesley said: "There's no sense of relief at all. He's a quality player. You only have to look at what he's done during the World Cup.
"It's a situation that through a range of circumstances a request was made to the club and we granted that request. We wish Jarryd well. We thank him for the contribution that he's made."
Hayne made his NRL debut with the Eels in 2006 and left in 2014 to pursue an NFL career.
Following sensational stints with the San Francisco 49ers and then Fiji's rugby sevens, Hayne signed with the Titans mid-season in 2016.
He declared at the time he wanted to go back to Parramatta but his former club couldn't match the offer and he joined the Titans, where he failed to regain his best form.
"I've thoroughly enjoyed my time on the coast. I love the community and the laid-back lifestyle," Hayne said.
"I thank every person, fan and sponsor that I've met during my time here and wish the Titans all the best in 2018."
Annesley denied Hayne's signing was a failure, claiming the club benefited from his profile.
"Everyone would've hoped that it worked out a little bit better on the field. He had that injury early in the season," he said.
"There were a couple of incidents where he would've preferred didn't take place and generated some publicity.
"But you only have to look at the interest that was generated in this club as a result of Jarryd signing to realise that this club benefited a lot in many ways from Jarryd's signing."