The club basically have two options. They can either let him go as a free transfer during the january transfer window, or pay him out of the rest of his contract. The former is more likely, but he is unlikely to be snapped up because of his wage demands (some £35,000 a week, for doing bugger all at the moment!)
What is likely to happen is that Everton will ensure that he plays a couple of games around december time, to place him in the shop window, and he'll leave in the new year. Unless he proves his fitness of course!