Neil Aspin said FC Halifax Town released Jason Jarrett because he was not in a position to offer him a contract.
Town fans have left stunned by the news that the midfielder, who has shone this year since signing in the summer, had been released without warning following training on Thursday night.
It was initially thought Jarrett may have left the club due to personal reasons, but Aspin says it was because he could not offer him a deal.
Aspin said: “At this stage in Jason’s career and with the changes in his personal life he was needing the stability of a contract.
“I was not in a position to be able to offer Jason that security.
“He goes with mine and the clubs best wishes and we hope he finds another club.”
Interest in Jarrett, who made almost 300 professional appearances including playing in the Premier League, from other clubs is already thought to be high.