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Defender Prior, one of four City players whose contract expires at the end of June, was told he was no longer part of Bluebirds boss Lennie Lawrence's plans.
City will offer new deals to goalkeeper Martyn Margetson and defender Gary Croft, but Gavin Gordon also looks to be on his way.
The striker could stay on at Ninian Park if he is unsuccessful at finding a new employer.
But there is still no final decision on York loan signing Lee Bullock, who has a £75,000 price tag on his head.
Prior, a £700,000 signing from Manchester City three years ago, is reluctant to drop down a division.
"I'm 100 per cent convinced I can play at First Division level so I've got to be aiming at First Division clubs," said the 33-year-old yesterday.
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