Edmonton spent the better part of a month courting the former 50-goal scorer - a process that started after Tambellini hammered out a deal with the Ottawa Senators for Heatley, only to have the winger refuse to waive a no-trade clause.
Talks continued until Tambellini decided earlier this week that enough was enough.
"We gave ourselves an allotted amount of time internally ... to explore every opportunity to see if there was something that would work - it didn't," Tambellini said during a conference call with reporters. "It's time for us to move on. We're very comfortable with that."
Heatley has been in limbo since requesting a trade from Senators GM Bryan Murray in the spring.
Tambellini knows him personally from past involvement with Team Canada and even flew to his home in Kelowna, B.C., for a face-to-face meeting just prior to July 1 - the day Heatley was paid a US$4-million bonus by the Sens.
The Oilers also sent along a recruitment video, but Heatley couldn't be persuaded to join them.
"They're just not ready to make a decision," said Tambellini. "That's the only answer that I got. That's all I can say."
Tambellini said everything "seemed fine" in the negotiations early on.
"Then there was a change of position with the way Dany's advisers were talking about things," said Tambellini. "Things changed after that and really never got back on track.
"That's fine - they can explore options elsewhere."
Heatley's agent J.P. Barry didn't immediately return an email seeking comment.
Tambellini also reiterated frustration that the proposed deal became public. Edmonton was willing to send Ottawa forwards Andrew Cogliano and Dustin Penner and defenceman Ladislav Smid - three players who currently remain with the Oilers.
Tambellini indicated that he would never publicly discuss the terms of a deal that fell through.
"That is extremely disappointing to me," he said. "Very, very unprofessional. Eventually, I'm going to find out, we'll find out who did that. ...
"I wasn't very happy."
Even though his continued pursuit of Heatley attracted some negative attention in recent weeks, Tambellini had no trouble justifying it.
"We took a very aggressive approach on July 1," said Tambellini. "There's not too many people out there that are in the prime of their career and have the potential of scoring 50 goals every year."
Heatley will be scoring those goals somewhere other than Edmonton next season.
Tambellini believes that the addition of goalie Nikolai Khabibulin and continued development of a young core will make the Oilers playoff contenders next season. Now that he's done chasing Heatley, he's not likely to try and make any other big moves.
"I didn't feel that it was stopping us from doing anything else," said Tambellini. "We had to make a decision that it was time to move on. We did everything that we thought we could. ...
"We've got a team that we're looking forward to seeing in September."