The midfield duo’s contracts are set to expire and the club have failed to agree on new deals with the duo.
Manchester United and Tottenham are favourites to sign Cole, who joined Chelsea in a £6.6million deal from West Ham in the summer of 2003.
A statement on the club’s official website read: “We would like to thank him for his dedicated years of service and wish him well in his future career.”
Ballack joined Chelsea on a free transfer from Bayern Munich in 2006.
Chelsea added: “All at the club would like to place on record our thanks for his service and wish him luck for the future.”