The Gers bought Ball from Everton in a £6.5 million deal three years ago, but the deal saw the Ibrox outfit shell out more cash depending on appearances.
McLeish has now admitted that Ball is heading out of the club due to the simple fact that they cannot afford to play him.
Liverpool's Gregory Vignal is on trial at Ibrox and he may join on loan to cover for the loss of Ball, but the Frenchman would only be signed on loan, such is the cash situation.
"I've spoken to Michael and said it is nothing personal, it's just a sad fact of football at the moment," said McLeish.
"There is an extra payment to be made when he plays a certain amount of games and, at the moment, we can't afford to do that.
"Could I play him? Yes. He still has a few games to go before there is a payment to be made.
"It's frustrating of course but I've always been aware of the parameters.
"And it's important everyone knows the situation with Michael because it has been a grey area.
"That's why we are looking at Gregory Vignal because, if Michael goes, I'm short of left-back cover.
"There have been one or two tentative enquiries for him although he is not as fit as the rest of the guys.
"He had a wee niggly ankle injury and should be training again in a week or so."
