The Dresden Dolls star posted a freedom letter on her official website celebrating her label-free status and noted that she would now be able to offer her songs for download and directly ask her fans for payment.
Palmer said: "I am very happy to announce today that I have finally been released from my contract with Roadrunner Records. As many of you know, I've been fighting very, very hard to get off the label for the better part of two years.
"For the past seven years, anything I have written and recorded (solo or with my band, The Dresden Dolls) has technically been owned and under the ultimate control of the label, but no longer.
"After endless legal bulls**t, it's over, I've been DROPPED, RELEASED, LET GO, whatever you wanna call it. in other words: I am FREE AT LAST!!!!!! RAAHH!!"
The singer-songwriter confirmed on Twitter that her former label would still own the rights to the three official Dresden Dolls albums and her own 2008 solo debut Who Killed Amanda Palmer.
In a letter to Roadrunner, Palmer explained her reasons for leaving but added: "No other label in America would sign us, but you did. All the cool, hip, indie labels didn't think enough people would like us. They passed.
"I will never regret signing with you... and I will never take for granted what you did to help my life."