James Wilson will spend the 2017/18 campaign out on-loan.
The defender, who joined on a free transfer from Oldham Athletic last summer, has agreed a season-long deal with Sky Bet League One outfit Walsall.
Speaking following confirmation of Wilson's departure, boss Chris Wilder said: "We thank James for his contribution last year in what was a very competitive area of the pitch for us. This loan move will give him a chance to re-establish himself and get games under his belt."
In total, Wilson made 10 appearances for United in all competitions last season, scoring the winning goal in the first victory of the campaign, against Oxford United last August.