Nielsen, 29, has already returned to Australia and is tipped to join St George Illawarra with his departure coming after the Warriors also released backrowers Feleti Mateo and Jayson Bukuya.
While they've gone, Kangaroos backrower Ryan Hoffman (Melbourne) and Kiwi second-rower Bodene Thompson (Wests Tigers) have both signed three-year contracts.
Also joining the Warriors is ex-Canberra centre Matt Allwood, who arrived in Auckland two weeks ago in time for the start of off-season training.
NYC premiership-winning Junior Warriors Sam Lisone, Solomone Kata, Ken Maumalo and Brad Abbey have been upgraded to full NRL contracts.
They join Tuimoala Lolohea and David Fusitu'a, both full-time NRL players this year, who made their first-grade debuts in 2014 while still being NYC-eligible.
McFadden said further signings for 2015 were still possible.
"We're always on the lookout for players to bring into our NRL squad from overseas clubs and from within our own system," said McFadden.
"But if we sign a player it has to be the right person who can add something to our squad."
Nielsen, a Queensland State of Origin player in 2011 and 2012, made 30 NRL appearances and scored two tries for the Warriors.
