Adams has made just over 400 appearances during his career turning out for Altrincham, Macclesfield, Stockport County, Huddersfield Town and Morcambe.
His last match for the Shrimp was the 2-0 defeat away at Cheltenham back in February.
Sammy McIllroy said "Danny's now at the stage of his career in which he needs to be playing football," McIlroy said.
"He's been a fantastic servant but I couldn't give him regular football. I've managed Danny on numerous occasions and he's never let me down.
"He was a great character and great to work with and has done a fantastic job for Morecambe.