Khan, 20 made his debut in 2014 under former boss Nigel Clough in the 1-0 victory over Rotherahm United, but during his tenure at Bramall Lane has starred mostly in the U-21s.
Having spent loan spells at Buxton and Matlock Town in the lower Divisions the midfielder will now join National League side Barrow and could make his debut at Wrexham tomorrow.