Bruce persuaded his board to fork out £2.5 million to bring Figueroa to England in the summer from Rosario Central.
But Figueroa failed to adapt to the demands of English football and made just two fleeting substitute appearances.
Blues cancelled the South American's deal earlier this week to enable the forward to clinch a move to Mexican side Cruz Azul.
Figueroa's exit from St Andrews was reached via a compromise to ensure the player could move clubs for the second time in the space of 12 months.
Blues co-owner David Sullivan lamented Figueroa's ability to justify the club's outlay but conceded manager Bruce felt the attacker was simply not up to standard.
"We've torn the contract up so he's eligible to leave," said Sullivan. "It's a shame but these things happen.
"Steve didn't think he was good enough or big enough to play in The Premiership and you have to respect your manager's judgment.
"Maybe had he got in the team and scored a couple of goals, things might have turned round but it wasn't to be."
