The player and the club have mutually agreed to end his playing contract as he deals with a personal matter which is currently before the courts.
“The Club has worked extremely hard with Yestin before reaching this decision,” general manager of football Rob Kerr said in a statement.
“During our conversations with Yestin it was clear just how important being with his family is to him, and we would never stand in his way of returning home to Western Australia.
“Yestin has a number of challenges to work through, and the club, where possible, will continue to support him as he addresses these.
“We are disappointed we didn’t get to see Yestin reach his playing potential at Essendon, but his priority now is to work on developing his life outside of AFL football.”
Eades had been stood down by the club indefinitely last month to deal with the issue.
The 19-year-old’s manager, Ray Purcell, thanked the club for its support of the youngster during a difficult period.
“From the outset we had a very positive and open dialogue with the Club about some of the challenges facing Yestin moving forward,” Purcell said.
“This was not an easy decision for Yestin to make, and he is very grateful the Club understands the importance and sensitivities surrounding his decision to return home.
“The Club has been very accommodating and shown genuine care for Yestin’s well being and long term development.
“While Yestin still has some challenges ahead of him, he is extremely grateful for having the opportunity to develop as a person and footballer during his time at Essendon.”
Eades, who did not make his senior debut for the club, was recruited by the Bombers with pick No.64 in 2015.
He was delisted by the Bombers at the end of last season, before being re-drafted in the 2016 rookie draft.