Teahen had been designated for assignment on Jan. 9, which gave the club 10 days to place him on waivers, work out a trade or release him.
The Blue Jays were unable to find an interested trade partner and are now on the hook for the remaining $5.5 million of Teahen's contract.
Teahen was acquired by the Blue Jays prior to the non-waiver Trade Deadline in a multiteam deal that brought center fielder Colby Rasmus to Toronto. Teahen's inclusion in the trade was for mostly financial reasons, as the White Sox were looking to cut salary in order to accommodate the deal.
The 30-year-old Teahen proceeded to hit just .190 with one homer and three RBIs in 27 games with the Blue Jays. His playing time was sporadic, and once Toronto acquired outfielder Ben Francisco during the offseason, there no longer appeared to be any room on the 25-man roster for Teahen's services.
Teahen is a seven-year veteran with a career average of .264, along with 67 homers and 332 RBIs. He has played for three different organizations during his career, and he has the ability to play the corner infield and corner outfield spots.