Johan Mjallby says it is especially disappointing that Islam Feruz has left Celtic considering the club helped the forward's family flee from Somalia.
The 16-year-old's agent has been quoted as saying that the Scotland youth international is to join Chelsea.
"It is probably extra disappointing because the club put a lot of faith in Islam and wanted him to be successful here," said Celtic's assistant boss.
"But it's hard to tell a player to be here if he doesn't want to be here."
Feruz was spotted in Glasgow as a 10-year-old and the late Tommy Burns, who was then Celtic's youth coach, was instrumental in helping prevent his family being sent back to Somalia.
The Scottish Premier League club point out that they took the family out of the Castlemilk housing estate to the more fashionable west end of Glasgow.
And Feruz became eligible to play for Scotland after having had five years of schooling, although he could yet switch back to the land of his birth at senior level.
But the youth, tipped as one of the brightest prospects in British football, has not returned to Celtic since last season.
Celtic manager Neil Lennon was quoted this week as blaming the forward's new agents for giving him bad advice.
"The last thing I heard is that he's not going to play for us any more and will be playing for Chelsea from now on," said Mjallby.
"I don't know all the details, but it is disappointing to lose a young, talented player.
"But, at the end of the day, it is down to him where he wants to play."
Celtic will hope to receive a compensation fee of around £300,000 should Feruz sign for another club now that he is old enough for a professional contract.
Chelsea have yet to confirm the signing of the teenager, despite his agent claiming that a deal has been done.