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The popular defender will be joining Melbourne Victory for the start of the new Australian National Soccer League which launches this summer.
Muzzy, who made over 60 appearances for The Lions in just under two seasons was quick to thank the club and supporters when explaining the decision behind the move.
"This has not been an easy decision to reach, "Muscat told the club's official site. "I have had such a good time here at Millwall.
"But after much deliberation I realised this is a perfect opportunity not only to be back in Australia at a very exciting time with the launch of the new Soccer League but also, and as importantly, to take my family home after many years abroad.
"I would like to thank the club for helping me to do this and I would of course like to thank everyone connected with Millwall Football Club and especially the fans for making my time here so enjoyable. I will always look out for their results and wish them all the best for the future."