Park Rangers at Loftus Road on Tuesday as his reported £19 million ($30 million) transfer was finalised.
The striker's spell at the Eastlands has been marked by a succession of controversies on and off the pitch but City manager Mancini insisted his side would miss the erratic player during the final weeks of the season.
"Mario was an important player for us," said Mancini of his fellow Italian. "With Mario we won the Premier League and the FA Cup in two years.
"He's a fantastic player but, for him, this could be an important chance to go back to Italy and play for a big club in Milan.
"It was a difficult decision because I lost a striker, an important striker, and he could be important in the next 14 games.
"But it's important for Mario to go back to Italy. It will be a good chance for him to stay with his family, to play for Milan. I think he can improve and I'm happy he will become one of the best players in the world."
Balotelli's impact has been limited this season with the striker scoring just one Premier League goal and his final weeks of the club were overshadowed by a training pitch confrontation with his manager.
Mancini, though, denied he had grown frustrated with a player he worked with at Inter Milan when Balotelli made his Serie A debut.
"I invest a lot of time with all players," Mancini added. "With Mario, maybe more. But I think that Mario is in the history of the club because we won three trophies in two-and-a-half-years, and he scored an important goal in big matches like Manchester United away. He did very well.
"We love Mario and he deserves to have this chance. For me, he was not a problem. For me, Mario was like another one of my children. Mario is this.
"You can be upset with him sometimes, but afterwards he's a lovely lad."
Meanwhile QPR manager Harry Redknapp will step up his efforts to strengthen his squad before Thursday's end of the transfer window after Ryan Nelsen said his farewells to the west London club following a draw that moved bottom-of-the-table Rangers to within four points of safety.
Nelsen is joining MLS side Toronto FC as coach and Redknapp wants to replace the New Zealander with Anzhi defender Chris Samba.
"We lose Ryan Nelsen now and I haven't got a replacement," Redknapp said.
"I let Anton Ferdinand go (on loan to Turkish club Bursaspor). We're desperately short, really.
"I don't know where we're at with Samba. The chairman (Malaysian businessman Tony Fernandes) asked me a week ago whether I'd be interested if he could get me Samba. I've left it wholly in his hands."
Redknapp, who in naming two goalkeepers among his substitutes against City highlighted his shortage of players, added he'd be keen to once again sign England striker Peter Crouch.
"I've always taken Crouchy where I've been: Southampton, Portsmouth, Tottenham... I love him as a boy. Whether Stoke would sell him, I don't know."
Although renowned as a shrewd operator in the transfer market, Redknapp was uncertain about QPR's prospects of signing new players before the window closed.
"We could get three or four. We could get none. None would leave us in trouble. We need a central defender, that's for sure."