Holleman finally returned to practice on Thursday but the lost time put him too far behind in the competition with kickers Jay Feely and Jake Arians.
Atlanta has to replace Morten Anderson, who was not re-signed after last season.
Holleman was signed by the Falcons in February and allocated to the Scottish Claymores in NFL Europe. He handled kickoffs and was a teammate of former Georgia receiver Corey Allen, a recent Denver signee.
Holleman was a two-year letterman for the Bulldogs and played in the 1998 Peach Bowl and the 2000 Outback Bowl.
During his season in Europe, Holleman wrote an exclusive journal about his experiences.