Bates is on track to graduate in May with a degree in community health and will be eligible to play next season.
"I want to thank my teammates and coaches, along with everyone who supported me here at the University of Illinois and allowed me to graduate with a degree from such a prestigious institution," Bates said.
Bates moved from linebacker to the hybrid LEO position in 2013, finished ranked eight on the team with 40 tackles. He was second in tackles for loss with 12 and 3.5 sacks.
"Houston is a terrific and bright young man, who was a great teammate on our football team," coach Tim Beckman said. "We certainly would have liked to have Houston remain on the team, but he indicated that he wanted to finish closer to home and his family. We wish him nothing but the best as he moves on in his career."