McArthur has made 252 appearances for Palace since joining in a then club-record £7million deal from Wigan in 2014.
The 35-year-old will depart Selhurst Park when his contract expires at the end of the season.
Palace chairman Steve Parish said: “James has been a mainstay of the side for the best part of a decade, and has never given less than 100 per cent when pulling on the shirt – his tenacity and energy has unquestionably had a huge impact on us retaining our Premier League status for that record period of time.
“An absolute stand-out professional, on and off the pitch, James’ leadership and character will be hard to replace. I’d like to personally thank him for his contribution to the club; and wish him and his family nothing but the very best for the future. We look forward to one day welcoming him back; he will always be welcome at Selhurst Park.”
James McArthur, a true Palace legend.
Thank you for everything, Macca ❤️💙#CPFC
— Crystal Palace F.C. (@CPFC) May 24, 2023
McArthur said: “If you’d have told me when I first came to Crystal Palace that I’d be here for nine seasons, I’d have found it hard to believe, because it’s rare in football to spend so long at such an amazing Premier League club.
“I would like to thank everyone: all my managers, the Chairman, [Sporting Director] Dougie Freedman, and the players present and past. I’ve had a journey with so many people here over the years.
“I also want to say a massive thank you to every one of the fans. The support that I’ve had personally, and the support that they give the team, is like at no other club. When times are tough, Palace fans really get behind the team, and that’s so important to all of us. I will always be a fan of the club.”