The Rays announced the decision prior to Sunday's game against the New York Yankees, promoting right-hander Nathan Karns from the minors to fill Bell's roster spot.
Bell, a three-time All-Star with the San Diego Padres, posted a 7.27 ERA in 13 games this season with the Rays.
The Rays will have 10 days to trade or release Bell before the 36-year-old can be sent to one of their minor league affiliates.
Bell has a 4.91 ERA in parts of three seasons since signing a three-year, $27 million contract with the Miami Marlins before the 2012 season.
The beleaguered Rays bullpen entered play Sunday with a combined 4.23 ERA over 110 2/3 innings -- the highest total in the American League.
Struggling Bell Designated For Assignment
ESPN.com MLB editor Christina Kahrl explains why struggling Rays closer Heath Bell has been designated for assignment.