"Following my talks with the club I've been told I could be back in the squad under certain conditions that I can't agree," the former France striker said in a series of tweets on his verified Twitter account, @anelkaofficiel.
"As I want to preserve my integrity I've decided to free myself and to put an end to my contract with WBA with immediate effect."
There was no immediate response from the club.
Anelka, who celebrated his 35th birthday on Friday, made the salute, widely regarded as anti-Semitic, when he scored the first of his two goals in a 3-3 draw between West Brom and West Ham United in a Premier League match in December.
After receiving a five-match ban and an 80,000 pounds ($133,000) fine for the salute last week, Anelka said on Thursday he would serve the ban and not contest the decision.
The FA, who wanted a longer suspension for the Frenchman, also said they would accept the five-match ban imposed by their Independent Regulatory Commission.
Anelka used the gesture, devised by French comedian Dieudonne M'bala M'bala, on December 28 at Upton Park. Anelka said he did it as a sign of allegiance with Dieudonne, a friend of his, and that he was using it as an anti-establishment salute.
The FA accepted that while the gesture is deemed to be anti-Semitic, Anelka himself was not an anti-Semite.
The commission's three-member panel ruled that both charges brought against Anelka had been proven - that the gesture was abusive and/or indecent and/or insulting and/or improper, and that it included a reference to ethnic origin and/or race and/or religion or belief.
His decision to quit his contract with West Brom is likely to signal the end of a long, controversial career for the striker, who played 69 times for France and a host of Europe's top clubs.
After making an initial impact at Paris St Germain, he had spells at Arsenal, Real Madrid, Liverpool, Manchester City, Fenerbahce, Juventus and Chelsea, among others.
He was part of Real Madrid's Champions League-winning team in 2000 and, in all, his aggregate transfers were worth close to 90 million pounds ($149.65 million).
He signed for West Brom as a free agent after leaving Juventus at the end of last season and played 12 times for the Baggies this term, scoring twice.
($1 = 0.6014 British Pounds)
(Additional reporting by Gregory Blachier in Paris; editing by Stephen Wood)
