Water-soluble preservative. This preservative is considered safe for use at concentrations up to 0.5%, although it is usually present at lower concentrations because it is only one part of a blend with other preservatives (such as parabens).
Diazolidinyl urea can be a formaldehyde-releasing preservative. Although that sound scary, the amount of formaldehyde released is well below the recommended limits of exposure. Moreover, other ingredients (such as proteins) in a product cause the free formaldehyde to evaporate and become inactive before it could possibly harm skin.
References for this information:
International Journal of Toxicology, March-April 1990, issue 2, pages 229-245