Lomu had been offered a one-year contract with the new NRL entity, but informed Titans officials of his decision on Friday to try and find a contract with a rugby union club.
Michael Searle, Titans' managing director, said he was disappointed but understood Lomu's decision.
"We understand and respect the business decision Jonah has made and wish him all the best in rugby and in life," Searle said.
"Both Jonah and (his wife) Fiona have been a pleasure to deal with and we look forward to having them as guests of the Titans at an NRL game in the near future."
31-year-old Lomu has been unable to secure a deal with a club in rugby's Super 14 competition as he continues his return from a kidney transplant in 2004, which ended his dream of making a comeback for the All Blacks.
The devastating winger became the youngest player to represent the All Blacks when he made his test debut aged 19 in 1994, quickly establishing himself as one of the most exciting players of his generation.
In a memorable performance at the 1995 World Cup in South Africa, Lomu single-handedly destroyed England in the semi-final with four blockbusting tries.
However the rare illness nephritis, which led to renal failure and the kidney transplant, put an end to his international career and has made it difficult to once again make an impact in the game of rugby.