The move came a day after releasing six other players.
A source told Scout.com that Bly was due $3 million in deferred signing bonus money at the end of March, $3.2 million in salary, plus a $400,000 workout bonus for the 2009 season.
Bly, an 11th-year player, spent the previous two seasons with the Broncos after they acquired him in a trade from Detroit on March 2, 2007.
Bly started all 16 games in both seasons in Denver, posting 57 and 77 tackles respectively. He also notched seven interceptions in his two years with the Broncos.
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