The transfer was unpopular with Owls supporters and Jones, along with the club's board, has come under fire, but he insists that it was the best move for the player and the team.
Jones told the Sheffield Star: "Chris enjoyed his time at Barnsley and sees we are now moving in a different direction. That's football. For me to bring other players in, some have to go. We wish Chris all the best.
"Unfortunately, we had to let someone go to create more space on the wage bill. I had to sacrifice a player, which happened to be Chris.
"As far as I'm concerned, we did good business in letting one go to free up money to bring in a couple of players."
O'Grady scored six times in 16 appearances during a loan spell with the Tykes last season.