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Manager Jimmy Calderwood made the announcement this afternoon, and Dempo is now set to continue his search for a club in the English lower leagues.
The Irishman, who was brought in to replace Steve Tosh at the club, has decided on the move due to the frustration at not getting a regular starting place this season.
Former Everton and Dunfermline player Dempsey, 26, will leave Pittodrie in the summer.