The use of magnetic nanomaterials for the removal of toxic pollutants from water is currently gaining a considerable attention due to their low cost advantage and separation via the use of external magnetic field. However, for efficient functioning, these materials have to be structured in a way that will allow sufficient interaction with the pollutants within a shortest possible time. This can be achieved by employing very small sized nanomaterials such as nanoclusters which bear a very high surface energy and thus exhibit very rapid reactivity. In this report, ultrasmall-gluconic acid capped superparamagnetic iron oxide nanoclusters coprecipitated with goethite and hematite (USPIONCs-Goethem) were synthesized via a new cost-effective green approach and employed for the precipitation of neutral red from aqueous saline solution. The presence of goethite and hematite was verified using powder X-ray diffractiometry. The resulted magnetic- neutral red nano-composite reassembled as sun-flowery-like nanostructure in the presence of an external magnetic field. A removal efficiency of about 92% was realized within a short time. This approach can be employed for the removal of other similar polyaromatic dyes bearing one or more lone-pair electron sites.