A technique facilitates on-demand release of desired sections of a well string, e.g. sections of a perforating gun string, via at least one on-demand release tool. The on-demand release tool has an activation mechanism which may be selectively actuated to transition the on-demand release tool from a first loadbearing configuration to a second loadbearing configuration. The on-demand release tool may then be transitioned to a release stage which allows a first section of the on-demand release tool to be separated from a second section of the on-demand release tool by activating a release mechanism. In at least some applications, the on-demand release tool also comprises a ballistic transfer device to enable reliable ballistic transfer between sections of the perforating gun string.