Media reports suggest that the Argentine appears to have been deemed surplus to requirements at Esteghlal.
Foolad, headed by Yahya Golmohammadi, is a favorite to win the 2024-25 Iran Professional League (IPL). It sits fourth, four points adrift of leader Tractor.
Esteghlal coach Pitso Mosimane has previously shown his dissatisfaction with Blanco and the player will most likely leave the team in the January transfer window.
The Blues will also part ways with French winger Gael Kakuta in the January transfer window.