O'Connor, one of the sport's top talents, was dumped from the national team in September and had his contract torn up by the Australian Rugby Union (ARU) earlier this month for repeated discipline breaches.
These culminated in the player being preventing from taking a flight because he was allegedly drunk, hours after Australia beat Argentina in a Rugby Championship match in Perth.
Despite Wallaby coach Ewen McKenzie saying he was willing to help O'Connor rehabilitate his career and Western Force offering him a lifeline when no other clubs were interested, the 23-year-old utility back has opted to move overseas.
"We have been informed by James directly that he intends to continue his playing career in Europe for the time being. The Western Force and RugbyWA wish him well in these endeavours," RugbyWA chief Mark Sinderberry said in a statement.
"The Western Force has laid strong foundations of standards and values -- particularly around earning respect -- and our discussions with James included on and off-field programmes that we believed could assist him in becoming the player he aspires to be and to develop himself as a person.
"James has made the decision that is right for him at this point in his playing career and the club remains open to recommencing these discussions again in the future if James wishes to return to Australian rugby."
O'Connor, who has played 44 Tests, admitted this month that he "needs to earn back a lot of respect".
"As a professional, I am focused on developing as a person and as an athlete and intend to do everything possible to put myself in the best environment to do that," he said at the time.
"I want to apologise for any issues that I have caused and I want to express my respect for my teammates, the Wallabies, and the jumper. There is nothing more important and rewarding to me than representing my country."