Micthell, who is yet to make his debut at AFL level, was the last remaining off-contract name at Waverley from the club's 2022 squad.
The move to axe Mitchell and rookie list him comes as one that will advantage the club's list planning ahead of the National Draft.
"Seamus has battled multiple injuries during his short time here at the club, and we are confident this decision will enable him to continue his development and give him further opportunities next season,” Hawks list boss Mark McKenzie said.
“Adding youth to our list has been a well-publicised priority for our club in this current phase.
“Injecting further talent through the draft and investing heavily into our younger players are both part of our plan to develop our list and return to premiership contention."
Mitchell joined the Hawks as the 29th overall selection from the 2020 National Draft.
The Hawks have already bid farewell to 11 players this year, with Jackson Callow (delisted), Connor Downie (delisted), Jack Gunston (Brisbane Lions), Kyle Hartigan (delisted), Daniel Howe (delisted), Ben McEvoy (retired), Tom Mitchell (Collingwood Magpies), Jaeger O'Meara (Fremantle Dockers), Tom Phillips (delisted), Jack Saunders (delisted) and Liam Shiels (retired) all departing.