The striker has joined Marseille on loan until the end of the season.
The striker was one of the more surprising deadline day movers of the January transfer window as he completed a loan switch to Ligue 1 side Marseille.
He had found his chances at the Stadium of Light limited under Allardyce, while the arrivals of Dame N’Doye and Wahbi Khazri were also likely to see him fall further down the pecking order.
And Allardyce says he allowed Fletcher to leave because he did not want him moping around the club as they seek to avoid relegation in the remaining games of this season.
"It was a big decision made by both of us but in the end Steven wasn't happy not to have played and I didn't feel he was going to get back in," Sky Sports reports Allardyce saying.
"I didn't want him hanging around, moping and feeling sorry for himself, so I took the decision on the fact we've got N'Doye, Jermain Defoe, young Duncan Watmore and Wahbi Khazri.
"They can all play on the front-line, so I think I've got plenty of options there."
Allardyce will now be hoping that his new forward recruits can hit the ground running in the 14 games remaining this season.
They have been heavily reliant upon Jermain Defoe to score the goals they need already, with his tally of nine in the Premier League more than what Fabio Borini and Fletcher have managed between them.
That over reliance could haunt them though, and they will be keen to see Khazri and N’Doye adding to that total as soon as possible.