The Moroccan international has been on loan with the Black Cats since January, playing nine games after his move from Paris Saint Germain.
But manager Mick McCarthy has told the 26-year-old that he will not be kept on next year as Sunderland try to rebuild in the First Division.
Injury meant that El Karkouri missed the last four games of a dreadful season and therefore had little chance to impress his new boss, and despite having expressed an interest in staying on Wearside, he will not now get his wish.
`Talal El Karkouri came to the club on loan and it was never envisaged that his stay would last beyond the season that has just finished,' a club spokesman told the official Sunderland website.
The Moroccan arrived at the Stadium of Light during the January transfer window as then manager Howard Wilkinson's second signing, and although he performed creditably both in central defence and midfield, he was unable to help halt the slide which made relegation inevitable.
He made his debut in the 4-1 defeat at Tottenham on February 8, the first of nine consecutive appearances.
However, he never finished on a winning side as the Black Cats ended the campaign with a run of 16 successive Premiership defeats.
El Karkouri becomes the latest in a string of defenders who have been told they have no future on Wearside after Emerson Thome, Phil Babb and Joachim Bjorklund were handed free transfers.