Danny Taylor has parted company with the Blues after he and the club agreed to cancel his contract and rejoined Colwyn Bay.
Right back Taylor became Steve Burr's second signing of the summer when he swapped Llanelian Road for the Swansway Chester Stadium in June.
He started the season as first choice but lost his place after two games and failed to win back his starting spot.
Ben Heneghan signed in August and he has established himself as Burr's preferred choice for the right back berth with some solid performances and important goals.
Taylor, 23, has not featured in the first team squad since the 2-1 defeat at Gateshead on August 30.
He arrived on the back of a fine 2013-14 campaign with the Seagulls, winning both the players' player and supporters’ player of the season awards.
Colwyn Bay boss Frank Sinclair has now brought the Chester-born defender back to the Vanarama North club.
"I am very happy to have Danny back, because he brings experience and quality to the squad," said Sinclair.
"It is important to keep on improving the squad in such a tough, but tight league if we are to realise our ambition of being in the promotion mix, and the competition for places we now have is of a very high standard for such a small squad.
"Players will have to play and train to the best of their ability to remain or break into the team."
Taylor hails from Connah's Quay and began his career with Shrewsbury Town. He made two Football League appearances for the Shrews but was released at the end of the 2010-11 season.
He moved to Welsh Premier League club Airbus UK Broughton and was an ever present in the 2011-12 campaign but asked to leave in September 2012 and then moved to Colwyn Bay.