Throughout his time in the United academy setup, Iqbal was tipped to eventually make the breakthrough into the senior setup.
His breakthrough ultimately came during the 2021-22 campaign when he was presented with his debut during the closing minutes of a Champions League fixture with Young Boys.
However, despite going on to become a full international with Iraq, Iqbal has failed to make another outing for the Red Devils.
Having been limited to EFL Trophy and Premier League 2 action during 2022-23, the decision has been made to allowed the 20-year-old to sign for FC Utrecht for a cut-price fee.
If reports are to be believed, the Eredivisie outfit have paid just £850,000 for the midfielder, but ESPN reporter Rob Dawson says on Twitter that United possess a buy-back clause.
A club statement read: "The club is proud of Zidane's journey so far and this presents an opportunity for him to develop his career within a new environment in a competitive league. Everybody would like to wish him the very best of luck for the future."
United later added: "Iqbal appreciates this is the next step for him, after regularly being part of the first-team squad last term, as he looks to fulfil his potential and make his mark in the Netherlands."
FC Utrecht recently finished in seventh place in the Eredivisie standings before missing out on a place in the Europa Conference League in the playoffs.
Iqbal has signed a four-year contract at Stadion Galgenwaard and is expected to immediately challenge for a regular starting spot.