Much had been expected of the 29-year-old after he swapped Roma for the south coast of England in August 2013, joining in a club-record deal that could have been worth up to Â£14.6million.
However, just 166 days later Osvaldo was shipped off on loan to Juventus after head-butting captain Jose Fonte, before spending spells at Inter Milan and Boca Juniors last term.
Now, Southampton have cut their losses, terminating the Italy international's contract with two years remaining.
A statement on the club's official website, www.saintsfc.co.uk, said: "Southampton Football Club can confirm that it has terminated the contract of striker Dani Osvaldo.
"The Italian international, who has not played for the club since January 2014, yesterday completed a loan spell with Argentinian club Boca Juniors."
It is believed that Osvaldo's stay at Southampton cost in the region of Â£25million, when taking into account the transfer fee, wages and pay-off - that would mean the forward's three goals in 14 Premier League appearances cost just over Â£8million each
Osvaldo has proved one of the most disastrous signings of the Premier League era, never mind the reign of divisive executive chairman Nicola Cortese.
Then Saints manager Mauricio Pochettino worked with the forward at Espanyol and helped persuade him to move to St Mary's, despite reported interest from Manchester City and Tottenham.
Osvaldo is now a free agent, with Bologna and Lazio said to be amongst the interested parties.
Source : PA