A statement from the Zurich Premiership club paid tribute to the US Eagle and thanked him for his seven years of service to Bath.
"Dan was a great influence with many of the players, helping a number of them with particular problems with sound advice for which he gained much respect. We would like to formally thank Dan for his time with the club and wish him every success for the future," said the statement.
Lyle added: "The time I have spent with Bath Rugby has been a very special time in my life. To have been received so warmly at the club so early in the professional era is something I will never forget."
It is not known whether the 32-year-old American is planning to retire from club rugby, stating only that he is looking forward to the challenge of captaining the US team in Australia.
"I am very excited about the next chapter in my rugby career taking in as it does the Rugby World Cup in Australia and my primary focus now will be on the USA national team as we enter our final preparations over the next few weeks."
Lyle joined Bath in 1997 as a relatively unknown entity from the Old Mission Beach Athletic Club in the US.
He was one of the lynchpins behind Bath Rugby's victorious 1997/98 Heineken Cup campaign, appearing regularly in both the second and back rows.
Lyle made his international debut against Ireland in 1994 and gained captaincy of the Eagles during their 1996 tour to Wales.
After being made Bath captain for the 2001/02 season, Lyle experienced testing times as the once all-conquering West Country side flirted with relegation, missing the drop narrowly last season.