Walsh, who moved to the Valiants from Glanford Park in a £175,000 move in 1998, would have been due a testimonial had he stayed one more season at the club.
But Vale boss Martin Foyle is not offering the 29-year-old an extension to stay at the club.
"I was asking for hardly anything so long as I could get my testimonial and have a good end to my Port Vale career," he told the Stoke Sentinel.
"I felt I deserved that. Had the manager offered me the worst deal in the world, I would have stayed, because I love it at Port Vale.
"He has said they can't offer me anything at the minute, but what does that mean? I have a family and I have to get on with my life. I can't understand the decision."