Google is introducing a new tool for fighting web spam, "disavow links" in the Webmaster Tools arsenal. This new tool, as the name suggests, is designed to enable webmasters to highlight links that point to their website but which they want removed or at the very least not considered by search engines in their rankings.
The only time you'd want this is when those links come from poor quality sites or Google has labeled them as paid links or part of a link exchange.
"If you’ve ever been caught up in linkspam, you may have seen a message in Webmaster Tools about 'unnatural links' pointing to your site," Google's Jonathan Simon explains.
"We send you this message when we see evidence of paid links, link exchanges, or other link schemes that violate our quality guidelines," he said.
Most of the time, this will happen if your site has been involved in an SEO campaign that violates Google's guidelines. If that happens to you, the best course of action is to contact the sites that link to you and ask them to remove the spammy links.
The tool was designed for the fringe cases where this is not enough and when you can't get all the links down. For the vast majority of websites, this is not a problem.
If this does happen though, you can compile a list of links you want Google to ignore and upload them with the Disavow Links tool.
Again, this tool should only be used if you get a notification from Google about bad links and when you can't get rid of them manually.
After you provide the list of links to Google, it could take weeks before it's taken into account, depending on how fast those sites are crawled.
What's more, Google won't guarantee that it will ignore the links you provide, in most cases it will, but it could decide to ignore your request sometimes, perhaps to save you from blocking links you may actually want to keep.
Matt Cutts talking about the new tool