Hernandez also faces five gun charges.
Hernandez charged with unlawful possession of a firearm, possession of a large capacity firearm and other gun charges.
The investigation is ongoing, according to Massachusetts state police.
Lloyd was shot to death with multiple gun wounds.
Although Hernandez's defense attorney called the case "weak and circumstantial," the unemployed NFL player was held without bail.
Hernandez stared straight ahead without an expression during the reading of the evidence by the prosecutor. The evidence seemed to reflect cooperation from other Hernandez associates and an extremely thorough investigation.
According to the prosecutor, Lloyd was shot in the arm, chest and side while he was lying on the ground.
A shell casing that matches the bullet that killed Lloyd was discovered in Hernandez's rental car.
Five .45 caliber shells from a semi-automatic weapon were found by police.
Surveillance footage, including six to eight hours of missing footage, was missing.
However, text messages from Hernandez and two other suspects was recovered.
The prosecutor said a witness told police that Hernandez was angry with Lloyd for speaking to a group of people at a nightclub that Hernandez had a problem with.
According to the prosecutor, law enforcement officials have video of Hernandez wielding a gun and saying, "You can't trust anyone anymore," prior to driving to pick up Lloyd prior to his death.
Lloyd and Hernandez were friends, and Lloyd's girlfriend and Hernandez's fiancée are sisters.
The prosecutor referred to the murder as an "execution," and accused Hernandez of concealing evidence.
His NFL career may be over. If convicted, he faces life in prison.
There is no death penalty in Massachusetts.
Michael Fee, Aaron Hernandez's lawyer, says defense not commenting due to gag order. When asked how client's doing, replied "Aaron's fine."
"Words cannot express the disappointment we feel knowing that one of our players was arrested as a result of this investigation," the Patriots said in a statement. "We realize that law enforcement investigations into this matter are ongoing. We support their efforts and respect the process. At this time, we believe this transaction is simply the right thing to do."
The NFL released the following statement: "The involvement of an NFL player in a case of this nature is deeply troubling. The Patriots have released Aaron Hernandez, who will have his day in court. At the same time, we should not forget the young man who was the victim in this case and take this opportunity to extend our deepest sympathy to Odin Lloyd's family and friends."
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