While Mancini was emotional about the £19m move, he insists that it was the best outcome for all parties.
He said: "It was good for everyone; for Mario, to take a big chance to go to Italy and play with top club like Milan. It was important for him and for the club.
"No, we are not happy. Mario did well, maybe not in the last three or four months because of injury, but he helped us win the Premier League and FA Cup. We are sad that he leaves.
"It was difficult. It was only my decision. I believe in him and I believe for him after two years in England, it was important for him to go back to Italy."
Balotelli scored 20 goals in 54 Premier League appearances for City.