Today at PubCon, during his keynote address, Matt Cutts announced the release of the long-awaited “Disavow Links” tool. This tool allows you to mark an inbound link to your site as spammy, letting Google know not to count the link when they crawl the site. For users that have been hurt by Panda or Penguin, this could be a savior – previously, the only way to get rid of links was to individually contact webmasters and ask them to remove the link (you can imagine the low success rate of this endeavor).
Cutts warned against the use of this tool except as a last resort. He was very clear about the fact that misusing this tool can greatly hurt your site. If you begin to disavow links that are not hurting your site, you can experience big ranking drops. He suggested that this should only be used for clients that are positive links are hurting them, and only when they are able to accurately identify those particular links.
In related news, Google will be letting webmasters know through GWT whether or not they receive penalties for bad links, and has also began to include a few samples of links that they don’t trust. Hopefully with this increased transparency about bad sites, webmasters will be able to identify exactly which links they need to disavow.