McCloud helped lead James Madison to an 11-1 record this season and No. 24 ranking in the AP poll.
"To my coaches and teammates who've become family, I am proud of what we have achieved together, and I leave with memories that I will treasure forever," McCloud wrote. "The lessons I've learned and the relationships I've formed here will undoubtedly guide me as I take this next step in my athletic and academic journey.
"To the JMU fans, I want to express my deepest gratitude to each and every one of you for the unwavering support you've shown me throughout my time here."
He completed 68.9% of his passes in 2023 and threw for 3,413 yards, 32 touchdowns and 9 interceptions. He also ran for 311 yards and eight touchdowns.
McCloud's move to enter the transfer portal comes a day after Curt Cignetti, who coached James Madison for five seasons, was announced as the new head coach at Indiana. The Hoosiers have already seen starting quarterback Brendan Sorsby enter the transfer portal and have a need at the position.
McCloud hasn't tipped his hand on where he will land next, but he will transfer to a new team with one year of eligibility remaining.