Lewes have released top-scorer Tom Murphy from his contract.
The 19-year-old striker has been frustrated by a lack of first-team opportunities at Blue Square South's bottom club.
O'Shea told the club website: "Tom said he wanted a regular run in the side. I understand that but I told him it's something I can't guarantee."
The former Gillingham has five goals this season but has fallen down the pecking order at the club.
O'Shea added: "I've bought in Lyle Taylor and Gary Noel up front, who both scored on Saturday, and Tom felt that he couldn't see much chance of a guaranteed run of games.
"I raised the option of a loan deal with him which he declined and instead asked to be released from his contract, which I have accepted.
"He's a young lad with a chance but still learning his trade. I would like to go on record in thanking him for his time here and wish him well for the future."
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