We present a new phase-separated Zr-based metallic glass (MG) composition, free of toxic elements (Ni and Cu) prepared in a glass-forming system by alloying addition. The substitution of Y in Zr _{70- x}Al _12.5Fe _17.5Y _x (x = 0–15 at.%) results in phase separation, giving rise to nano-amorphous domains in a glassy matrix. A homogeneous MG feature is observed for low concentrations of Y up to x = 5. Microstructure and thermal property analysis indicate that the glasses with x = 10 and 15 at.% Y exhibit a typical liquid phase separation-induced two-glassy phase (Zr-rich and Y-rich) with droplet-like microstructures (nano-amorphous domains). With increasing Y addition, the domain size increases. The microstructural evolution arising due to phase separation in these alloys is confirmed by a combination of transmission electron microscopy (TEM) and atom probe tomography (APT) analysis. The formation of nanometer-size Y-enriched clusters is confirmed by APT for x = 15.