It was clear from the start of the season that the 32-year-old German World Cup winner would not have a future under manager Jose Mourinho.
The midfielder made just four appearances, none of which were in the Premier League, and at one point he was ordered to train with the development side.
This morning, Chicago Fire announced that Schweinsteiger has agreed a deal, thought to be one year in length and worth £70,000 a week.
Now, United have confirmed the news, stating that it will be officially completed once the midfielder has undergone a medical and a visa has been approved.
"I am sad to leave so many friends at Manchester United, but I am grateful to the club for allowing me the chance to take up the challenge at Chicago Fire," Schweinsteiger told the club's official website.
"I have enjoyed working with the manager, the players and staff here and wish them all the best in the future. But I have to reserve special thanks to the United fans – whose support has been a very special part of my time in Manchester.
"I was delighted to be part of the squad that won the FA Cup for them last season and will always remember their energy and their passion. Now is the right time for me to start a new chapter in Chicago and I am looking forward to it."
The midfielder also uploaded a video onto his official Twitter page thanking the staff, his teammates and the supporters.
Schweinsteiger, who spent 13 years playing for Bayern Munich, joined United in 2015 when Louis van Gaal was manager.