Cutler, joined the Iron in April 2011, moving from Bury as part of Alan Knill's management team.
Iron boss Brian Laws was disappointed to see Cutler go, but suggested Cutler wanted to move closer to home.
"We were always going to have to sit down with Neil to see where we were going to go," Laws told the Scunthorpe Telegraph.
"We're having to cut our cloth accordingly and everybody has to pull their belts in tight and take a hit.
"The conversation we've had with staff is that we have to take cuts.
"It's not right the players should only have to do it, we'll all do it, that's the deal.
"We have agreed to let him go in principle and move to Walsall, nearer his family home.