Balotelli is in Milan for a medical with the Rossoneri on Wednesday after the Serie A giants agreed a fee with City.
Should the Italian striker complete the move it would end a turbulent spell in England since arriving from Inter in 2010, with his exploits both on and off the pitch leaving their mark.
The Nerazzurri were being linked with the 22-year-old before fierce rivals AC Milan made their move but Moratti insists a deal was never on the cards.
He told Sky Sport Italia: "Balotelli could be a bargain for AC Milan but that's their own business.
"There is no regret for us since he had already played here and at this time we didn't need him.
"A deal like this can serve (AC Milan president Silvio) Berlusconi for many reasons. But it is a deal that we could not and did not want to do."
Meanwhile, Stuttgart midfielder Zdravko Kuzmanovic has confirmed he is on his way to Inter despite interest from other clubs, with Liverpool thought to be keen.
He told tuttomercatoweb.com: "I'm happy to come and play for Inter. Tonight I will be arriving in Milan.
"There was also the interest from Valencia but my desire has always been to return to Italy."