The decision comes as the two sides were trying to get a new contract done. Jones now becomes an unrestricted free agent and can sign with whichever team he wants to in free agency.
However, the latest report from NFL Network insider Ian Rapoport suggests Jones and the Packers still want to get a deal done.
"There was some discussion about the Green Bay Packers placing the franchise tag on Aaron Jones - especially because the number was slated to be so low, possibly even $8 million," Rapoport said on Tuesday night.
"This is a player, from what I understand, that the Packers do want to keep. They do want to sign him. I know they had extension talks late late into the season, offering him more than $9 million per year."
Jones has been one of the most underrated and most productive running backs since entering the NFL. He ran for 1,084 yards and 16 touchdowns in 2019 - leading the league in touchdowns.
The Packers star put up another 1,000-yard rushing performance in 2020 with 1,104 yards and nine touchdowns last season. He improved his yards per carry from 4.6 to 5.5 yards from 2019 to 2020.