A statement released by the Old Trafford outfit confirmed that their long-serving captain has departed with immediate effect.
The 34-year-old’s representative Michael Kennedy met United chief executive David Gill at Old Trafford to finalise details of Keane’s severance completing one of the most dramatic departures the club has ever known.
A previous offer for a testimonial in recognition of the Irishman’s 12-and-a-half years at Old Trafford has been confirmed in writing but Keane will not be at the club in an official capacity if he decides to take the offer up.
"It has been a great honour and privilege to play for Manchester United for 12 years Keane told official club website www.manutd.com.
"Whilst it is a sad day for me to leave such a great club and manager I believe that the time has now come for me to move on.
"After so many years I will miss everyone at the club."
Keane had already cast doubt over his long-term future at United earlier this season when in a live phone-in he said he believed that his current contract which was due to expire at the end of this season would be his last.
In their official statement United have made it clear that Keane is now free to sign "a long-term deal with another club to enable him to secure his playing career beyond what would have been the end of his contract at United in the summer".
United manager Sir Alex Ferguson was quick to pay tribute to Keane’s contribution.
"Roy Keane has been a fantastic servant for Manchester United said Ferguson.
"The best midfield player in the world of his generation he is already one of the great figures in our club’s illustrious history.
"Roy has been central to the success of the club in the last 12 and a half years and everyone at Old Trafford wishes him well in the rest of his career and beyond."
Gill added: "Roy has been a towering figure at the club for over a decade.
"His dedication talent and leadership have been qualities that have marked him out as one of the true greats.
"On behalf of everyone at the club we wish him every success in his future career."
The last of Keane’s 326 league appearances for United came at Anfield in September when he broke his foot late in the goalless draw with Liverpool.
The Irishman is thought to be close to a return to action although where it will be is now open to major debate.
Throughout his many triumphs at Old Trafford since his £3.75million arrival from Nottingham Forest in 1993 probably his greatest performance came in the Champions League semi-final second leg against Juventus in 1999 when he virtually singlehandedly rescued United from the brink of defeat to steer them into the final for the first time in 31 years.
His efforts came at a cost though as a booking picked up in the game meant he was suspended for the final ensuring he missed United’s greatest day in his time at the club.
"During my time at the club I have been fortunate to play alongside some of the best players in the game and in front of the best supporters in the world said Keane.
"At all times I have endeavoured to do my best for the management and the team."
Portsmouth became the first club to publicly declare their interest in signing Keane on Friday afternoon.
Pompey chairman Milan Mandaric has quickly targeted Keane as the type of player who could help the struggling Barclays Premiership club out of relegation danger.
A statement from the club read: "Following instruction from Portsmouth chairman Milan Mandaric the club’s chief executive Peter Storrie is making enquiries about the availability of former Manchester United player Roy Keane.
"Mandaric believes Keane is exactly the kind of positive character Portsmouth Football Club would welcome."