The Nigerian impressed during his loan spell at the Premiership outfit last season despite being hampered by injuries, but the Scottish champions chose not to trigger the one-year extension option in his contract.
Bursaspor eventually won the race for the forward’s signature. O’Neill revealed he had been optimistic about keeping Iheanacho at Parkhead, but said his reported wage demands ultimately made a permanent deal impossible.
“There are always two sides to every transfer. He’s gone, I thought we had a deal with him at the time but that wasn’t the case and so he’s gone to pastures new,” O’Neill was quoted by Daily Record.
“The option ran out, that’s fine. But the option would be to take someone on similar terms to before, so that’s where the difference was. Where Kelechi did terrifically well for us as an impact player coming on.
“He started one game in my two spells against Dundee United but it would have been nice to have him for pre-season. He’s chosen to go elsewhere.
“I don’t know what date. I just tried to answer it the best possible way. I thought we had a deal with him but it didn’t materialise. If he’s gone to another club that’s his decision.”