27-year-old Mac Allister shone in his first two seasons since joining Liverpool from Brighton for around 35 million pounds, and he helped them to win the Premier League in 2024/25.
However, the Liverpool midfielder's form took a dip last season for which he received plenty of criticism.
This led to reports linking Mac Allister with an exit from Liverpool, with Manchester City among those linked with the 2022 World Cup winner and 2026 World Cup finalist.
Mac Allister has two years left on his Liverpool contract, and he has now revealed to reporters that the club is "not in a position" to offer him a new contract, while he has confirmed that he had a "chance" to leave before the beginning of the season.
"There was a chance, as I think everyone knows," Mac Allister told reporters when asked if he could have left Liverpool.
"I received the news that the club was not in a position to offer me a new contract, which makes me very, very sad."
On not getting a new contract, he continued: "It's really sad. We won a Premier League title together. We went through difficult times together. We will see what happens.
"Of course there is still time, the fans don't need to worry I will give 100 percent until my last day.
"There were options to leave, right now I am in the right club."
He added: "I love this club. I love being here, I love the fans.
"As a player, it sometimes happens that you're at a club for a long long time and you don't realise where you are.
"That doesn't happen to me. I know very well that this is an amazing club, that this city has something very special and of course I love being here."
But Mac Allister has spoken positively about new head coach Andoni Iraola, who is "something special".
"Definitely since I came to pre-season I worked under Andoni I could see something special," Mac Allister said on Iraola.
"I said before he is a really good coach, he knows very well what he wants to do. We are trying to get there.
I haven't had any conversations with him about it, but when I see the way he wants us to play and train I think we can have a successful year which is why I think this is the right place to be."