The 22-year-old Nigerian has joined Spanish third division side Mérida AD for an undisclosed fee.
Right-back Godswill joined Town in November 2016 after leaving Barcelona B but has made just three League One appearances for Uwe Rosler's side.
Since the arrival of Gethin Jones from Everton Godswill has gone further down the pecking order at right-back and has left the club for regular game time.
In all he made 15 appearances for Town scoring once in the Checkatrade Trophy against Leicester City under 21s this season.
A club spokesman said: "Everyone at the club would like to wish Godswill all the best for the future, and thank him for his efforts whilst at Fleetwood Town."