According to reports, Beckham's decision follows a move by his advisers to push for a profit share agreement in his sponsorship and marketing deals. It is understood that Gillette was only prepared to offer a flat fee in a 12-month deal.
Last year, Marketing magazine reported that Gillette was planning to let Beckham go, when it reported that the razor brand had signed up Tiger Woods, Thierry Henry and Roger Federer for a global campaign entitled "Champions".
Despite this, the two parties are understood to have been in talks for weeks about an agreement to coincide with the start of Beckham's five-year contract with Los Angeles Galaxy.
Beckham signed a three-year deal with Gillette in 2004, which ran out on June 30, and has featured in ads for the company's M3Power and Fusion razors.
According to a survey of 614 Americans by Birbeck Sport Business Centre, less than half know who David Beckham is. Nevertheless long-time sponsor Adidas has already launched a major ad campaign in the US showing Beckham trying out American Football with New Orleans Saints star Reggie Bush.