Dundee Utd thwarted over deal for Sunderland's O'Donovan
O'Donovan only joined from Cork City in a £670,000 move last month.
"I would have taken Roy in a minute," revealed Levein. "We thought the loan deal was done, then it became clear this regulation would come into play."
Since the 22-year-old centre-forward's arrival, Andy Cole and Kenwyne Jones have been added to the squad.