Alex Neil says he allowed Melle Meulensteen to leave Preston because opportunities in the first-team would be limited.
The midfielder has joined Dutch side RKC Waalwijk, his contract at PNE having been cancelled by mutual consent.
Meulensteen, 18, was the skipper of North End’s youth team which reached the last eight of the FA Youth Cup a year ago.
He signed a pro deal last summer but was loaned to Lancaster City in September.
Towards the end of that loan spell, he was not getting in the Dolly Blues side.
PNE boss Neil said: “I think I have a duty of care to players to make sure we give them the best chance of a career in the professional game.
“I didn’t think Melle was going to get a chance here.
“With the youth we have got in our squad at the moment and the fact we have a lot of young lads, I wanted to make sure that Melle wasn’t going to waste his crucial years here and have nothing at the end.
“He was struggling to get game-time here so we sent him on loan to Lancaster – he wasn’t getting game- time there either.
“I just felt it was better for Melle and the club that he moved on and hopefully furthers his career elsewhere.”
Meulensteen was on the books of Manchester United as a schoolboy before joining North End’s academy in 2014.
The following year he was taken on as a scholar, doing a two-year apprenticeship.
He was one of three players from his age group to be signed professionally, together with Josh Earl and keeper Callum Roberts.
Earl has pushed on to be a regular in the first-team squad this season, while Roberts is on loan at Skelmersdale but still training during the week with North End.
RKC Waalwijk have given Meulensteen a contract until June 2019, with the option of a further two years.
Waalwijk play in the Dutch second tier.