Helan's loan spell at Hillsborough came to an end last week and Jones had wanted to re-sign the Frenchman until the end of the season, but he has revealed that it is unlikely to happen.
Jones told BBC Radio Sheffield: "Watford have come in and wanted to buy him.
"He came here, he did well. We're just disappointed somebody else has come in. At this moment in time we can't match what Watford are offering.
"We wanted him to stay and we tried to persuade him but he got a fantastic offer elsewhere."
The 20-year-old has made just one appearance for Manchester City.