I have a guy with a large multi-year contract.

He cleared waivers successfully.

I dropped him to AAA successfully.

I am now trying to remove him from my 40 man roster.

The computer said it spoke to him and if I take him from the 40, he will elect free agency, so I may either keep him on 40 man roster or cut him.  

The question is, if I cut him, will I be responsible for his remaining contract? I wouldn't think so since it's his choice, but there's too much money involved for me to guess.

You will be on the hook for his salary for the remainder of his contract.  If another team signs him, they pay the league minimum, you pay the rest.

NEVER release a guy with season's remaining on his contract.

Thanks guys.

you can remove him from the 40 by designating for assignment w waivers.

No.  They can decline.

You are attempting to remove R.J. Laffey from the 40-man roster. He has the choice of becoming a free agent instead of accepting the move. We asked the player what he would do and he responded that he would elect to become a free agent. You may either keep him on your 40-man roster or release him.

Hardball Dynasty – Fantasy Baseball Sim Games - Player Profile: R.J. Laffey

Unless the "w" mean "without" waivers. 

That is the same message I got Mike.  The question then is if I release him am I responsible for his contract and the answer I got is yes. Doesn't seem fair since he's the one making the decision, not me.

You offered him a contract.  He expects you to live up to said contract.   You're trying not to.    It's kind of you making a decision.   That's why it plays out that way.

It's in the Major League Baseball collective bargaining agreement:

If a player has 5 years of major-league service, he may not be assigned to a minor-league team without his consent, regardless of whether he has already been outrighted once, even if he clears waivers. If the player withholds consent, the team must either release him or keep him on the major league roster. In either case, the player must continue to be paid under the terms of his contract.