The 36-year old former Socceroos captain, who spent time on loan with Doncaster Rovers after signing with Watford, has been desperate to string some games together ahead of the FIFA tournament in Brazil.
Since February, Neill managed just a handful of appearances in the English Championship during his time at the Keepmoat Stadium and Vicarage Road which was not enough for Postecoglou to seriously consider including him in his plans.
"I had a conversation with Lucas regarding the World Cup squad and obviously before I announced the 30-man squad next week I thought it was important for me to speak to him directly," Postecoglou told Football Federation Australia's official website of the 96-time international.
"I informed him that he hasn't made the 30, from my perspective paying due respect to the fact that he's been the captain for six years and the captain of the World Cup campaign so far.
"It was difficult, he's worked damn hard to get himself ready and available; he's shown an enormous determination to go to this World Cup.
"You can see why he's played for his country as many times as he has and why he was a leader, he's gone down fighting."
Postecoglou will name a provisional squad of 30 players on May 14 before assembling the players on New South Wales' central coast the following day.
For breaking stories and all the great banter like us on Facebook: facebook.com/tribalfootball