Theophanous joined the Clarets in March and instantly made an impression to the City supporters by scoring five times in his first six matches.
The prolific goalscorer's scoring form came at an important time for Chelmsford, with the striker netting seven times in his thirteen appearances.
Also departing the Club are Matt Young and Max Cornhill.
Cornhill was enjoying his second spell with the Clarets but a number of injuries meant the midfielder had first-team chances limited.
Young made 14 appearances in all competitions for City, netting just once. However Young's solitary goal will live long in his memory for being a long-range Goal of the Season contender in the rout against Bishop's Stortford on Boxing Day 2016.
Chelmsford City Football Club wish all three players the very best for the future and thank them for their services.