Nalis joined United last summer after being released by Leicester City but has failed to make an impact and has only managed five first team appearances, also the in form of Nick Montgomery his chances have disappeared.
The 34 year old was send out on loan to Coventry City but failed to make an impact their and returned to Bramall Lane.
"With today's signing of Garry Flitcroft we feel his chances of playing will become more limited.” Said Blades boss Neil Warnock
"It hasn't worked out for him but only because of the injury and then the form of Phil Jagielka and Nick Montgomery. We wish him well and thank him for his efforts."