Earlier this month (Oct 2012) Google announced the release of a new tool to Google Webmaster Tools. The new tool allows you to "disavow links" from websites which you believe maybe harming your website, which you have previously asked to be removed by the webmaster but no action has been taken from your request. That's it in a nutshell.
Did you really think that is all I would say, c'mon now.
Refreshing the Memory: How Links Work in Search
In the Google search algorithm there are hundreds of factors which create your ranking for a given search term. These factors are in constant flux and this is why from day to day, location to location etc your results will vary.
One of those factors, a big factor in many cases, is links between websites. Google see's them as a vote from one website to another, from the linking site to the linked to site. That's great but links are often abused and so the link worth is diminished and in some cases can have a negative impact on your search rankings.
In recent month we have seen Google make attempts to warn webmasters that they have bad links and that they should try to remove them as they may potentially be harming the rankings of their website. These "manual link warnings" have led to lots of webmasters rushing to remove bad links from websites they consider "bad neighborhoods" (aka harmful). These include the likes of porn websites, malware ridden websites and link farms, among others. Some websites even changed their url and asked the "good websites" to change the links they had on a given page, something I feel has a better likely hood of working.
So What is the Disavow Link Tool?
Disavow: Deny any responsibility or support for.
Put simply the new tool release by Google is to allow website owners who've tried everything they can in their power to removed links by "disowning" them. You simply upload a list to GWT and Google will disavow those links and ignore them within a few weeks (apparently). You can update the list to add and remove links, but as Matt Cutts explains in the video below it will take a long time for a link to be "re-avowed".
So there you have it a nice shiny new tool for webmasters having problems with links. And here is Matt Cutts to explain a little more about the Disavow Link Tool.