Disavow URL refer to the quality control of the backlinks referring to a website by asking Google to not consider specific links or domains because of their low-quality or spam content. Websites can create a list of links or domains to disavow and upload them for Google to check and consider in order to maintain a proper SEO ranking.
Google allows websites to control the indexed information and to ask Google not to count certain links that refer to the website.
The Disavow URL tool is free to use Google published the documentation on how to use the tool as well.
There are a lot of spam websites or situations that could create unnatural links to your site, that could affect the quality, ranking, and authority of the website. If these type of links pointing to the website cannot be removed from various reasons, Google allows the website owner to disavow those referring links.
Please note that this is an advanced feature and should only be used with caution; if misused, this feature can potentially harm your site's performance in Google's search results and all the SEO efforts done in the past.
Sometimes website owners may outsource SEO experts for backlinking strategies, and they end up with spam referrals and very low-quality backlinks that will actually hurt the site, instead of helping it rank better. To see the list of URLs linking to you, check the Referral Pages or download the data from the Links report given in the Google Console and create a list of URLs to Disavow.
If there is a considerable number of spammy, artificial, or low-quality links pointing to a site, and/or the links cause manual action on the website, here's a step-by-step guide to disavow the links: