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Murray joined the club on a free transfer from Premier League side Watford on the summer deadline day but, after the arrival of Director of Football Tim Sherwood, the Republic of Ireland international found himself out of favour at the County Ground.
When he arrived on August 31 last summer he signed a one-year deal with the option of an extension but the 23-year-old had his contract cancelled at the club which has freed up a move for him to join Colchester United, who are in the play-off chasing pack in League Two.
He played 23 games for club, scoring one goal, against Northampton in a 3-1 home loss although he did have a shot in the 3-0 win over Charlton that ended up going down as an own goal.
Colchester have tied Murray down to the summer of 2018.
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