The Brazilian defender's contract is up this summer and Liverpool have not come to an agreement with the left-back over a new one so he will be moving on.
Benitez told the club's website: "Fabio's contract is nearly finished and he is going to leave us.
"We had been trying to work something out with regards an extension but it was a pity that we couldn't. He has given us absolutely fantastic service.
"Fabio is a top professional, a great player and a really good lad. I mean every single word I say about him.
"It has been a pleasure having him here and we really will miss him"