The two sides had tried to work on a contract restructuring to prevent his departure but ultimately could not reach an agreement, leading to Armstead's exit.
On his podcast, "Third and Long," Armstead opened up about the situation, stating that the offer the 49ers extended was insulting, especially after playing nine seasons for the organization.
After the Super Bowl, the 49ers approached Armstead to discuss the restructure, which he expected. The team had initially indicated that it wanted to sign him to an extension, keeping him in Santa Clara for a long time.
That's what made the 49ers' offer so shocking.
"And so they extended an offer to me of $6 million for a one-year deal with incentives to go up to, like, eight," Armstead revealed. "And when they sent that over, I did feel extremely disrespected. I don't feel that level of compensation is nowhere near the type of player that I am. And not even just the type of player that I am, what I have committed to the game, what I've committed to my team, what I've committed to the organization in my community."
Armstead added, "So I didn't feel like that offer was anywhere near the level of compensation for a player like me. And so, in that moment, it was definitely tough. I had to make some decisions."
This week, general manager John Lynch made it clear that the team no longer felt Armstead's production justified his substantial salary, especially considering his absence from 13 games over the past two seasons.
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Up against the salary cap and with impending large contracts for Brandon Aiyuk this year and Brock Purdy next year, the 49ers found themselves unable to retain Armstead at his current salary level due to his inconsistent availability.
"Some realities come to bear that you can't keep everybody, and so you have to make some tough judgments," Lynch explained. "And we worked with Arik, and really appreciative of he and his family and representative of trying to work something out with a restructured contract. [We] took a couple different whacks at different ideas.
"And ultimately, he wanted to go see what his value [was], and good for him, because it was robust."
Armstead went on to sign a three-year, $43.5 million contract with the Jaguars.
Head coach Kyle Shanahan acknowledged the difficulty of parting ways with the veteran defensive lineman, stating, "It was real tough. I mean, we've been with Arik since we've been here, and I know he was here a couple of years before us, so it wasn't something we really wanted to happen. It's one of the tough things when trying to keep a team together, and just where it goes with the salary cap and stuff."