The 20-year-old - who was born in Manchester but represents Iraq at international level - made history in 2021 as the first-ever British South Asian men's player to play for the Red Devils.
Iqbal rose through the youth ranks at Old Trafford and was called up by Ralf Rangnick for a Champions League group-stage clash with BSC Young Boys, coming off the bench for the final minute of that 1-1 draw two seasons ago.
However, the midfielder has not made another first-team appearance for the Red Devils since and continued to develop in the Under-21 side last term, registering one assist from 13 games.
Iqbal made the bench for Erik ten Hag's side in the Premier League, Europa League and EFL Cup, but having failed to play a single minute under the Dutchman, an exit is on the verge of going through.
According to The Athletic, the Iraq international is set to continue his career with Dutch outfit Utrecht, who will pay Man United €1m (£858,000) for his services.
The report states that Iqbal is set to pen a four-year deal with Utrecht until the summer of 2027 - which includes a "significant" sell-on clause for Man United - and he completed his medical on Monday.
Iqbal only signed a new Man United deal in the summer of 2022, and those terms are not due to expire for another two years, but the Red Devils are happy to let him advance his career elsewhere for a cut-price fee.
The 2003-born lynchpin is unlikely to be the only midfielder to bid farewell to the Theatre of Dreams this summer, as Fred and Scott McTominay could also become victims of Ten Hag's next shake-up.
The duo hitherto featured regularly for the Red Devils before the signings of Casemiro and Christian Eriksen, who quickly became two of the first names on the team sheet for Ten Hag.
Fred is only under contract until 2024 and is believed to be attracting interest from Fulham, but the Cottagers are not willing to pay Man United's £20m asking price.
Meanwhile, there have been suggestions that McTominay could be used in a player-plus-cash deal with West Ham United for Declan Rice, although Arsenal are still the favourites to sign the Englishman.
However, the Red Devils are fighting tooth and nail to sign Chelsea midfielder Mason Mount, who has already been the subject of one failed offer from the 20-time English champions.
Man United supposedly approached Chelsea with a fresh bid worth up to £50m on Wednesday, but the Blues turned down their revised offer and are hoping to receive as much as £65m, although there is confidence that an agreement will eventually be reached.