The young defender, 22, burst into the Premiership limelight in 2000-01 when he made a superb debut against Liverpool but was unfortunately laid low by injury for the last couple of seasons.
Always the model professional, Alton returned to reserve team action in January and impressed for the second half of last season.
Capped at England U21 level, Alton made 21 appearances for us in total.
We wish him all the best.
The club can also confirm that goalkeeper Gavin Kelly and midfielder George Snee have been released.
Alton Thelwell will be released by the club at the end of his contract on June 30.