The fourth overall pick in last year's Draft was among eight players cut from Major League camp on Sunday. Bundy was optioned to Class A Delmarva, where he likely will start his first professional season.
The Orioles' No. 2 prospect appeared in three games this spring, including one outing out of the bullpen with the team's big league squad. He pitched an inning of scoreless relief against the Red Sox on Tuesday, retiring Jacoby Ellsbury and Adrian Gonzalez.
The 19-year-old Oklahoma native also pitched in an intrasquad game and threw two innings in Sunday's "B" squad game against the Red Sox before he was reassigned.
"Obviously, every pitcher wants to face the best," Bundy told MLB.com. "That's how any pitcher gets better, facing the best."
Bundy -- whose older brother, Robert, was the Orioles' eighth-round pick in 2008 -- was named 2011 Gatorade National Baseball Player of the Year and Baseball America High School Player of the Year.
Manny Machado technically was not with the big club, but the Orioles' No. 1 prospect also was sent to Minor League camp along with outfielders Xavier Avery and L.J. Hoes, catchers Michael Ohlman and Brian Ward and right-hander Steve Johnson. Infielders Ryan Adams and Josh Bell were optioned to Triple-A Norfolk.