Butler had been offered a new one-year playing contract with a continued pathway into coaching over the following two years.
But he has instead opted to join Scunthorpe United on a one-year contract, understood to be on improved terms.
“We offered Buts what I thought was a very good deal and I wasn’t going to budge on it to be honest,” McCann said.
“It was a year playing contract and a two-year coaching contract after that.
“It was almost like a three-year deal.
“Within that, my conversation with Buts was if we get to this time next year and we feel as if you can still play and you do too then we’ll just carry on.
“It would have maybe been another year’s playing and a one-year coaching thing.
“We felt it was a really good deal in the whole over the three years.
“But obviously a club has given him a bit more in his wages which is fair enough.
“It is what it is.“I’m really comfortable with where I am at the centre back situation.”
The Doncaster-born defender arrived at Rovers in October 2014, initially on loan from Sheffield United before making the deal permanent in January 2015.
The 35-year-old leaves having made 222 appearances for his hometown club, scoring 17 goals.
He also coached Rovers’ U16s this season, having worked his way through the age groups.
It is understood Butler’s former club Scunthorpe United are interested in a return to Glanford Park for the defender.