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Published 12:39 15 Dec 2016 GMT
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The former Leeds United and Aston Villa manager, who is currently an ambassador for Arsenal, the club he made 722 appearances for, revealed that he tried to get the Gunners to sign Coleman.
However, Arsenal were well-stocked for right-backs.
"Seamus Coleman has been as good a full-back as anyone for a long, long time," O'Leary said on 2fm's Game On.
"I was trying to push him Arsenal's way but we had a young lad coming through, [Hector] Bellerin."
While Coleman is undoubtedly one of the best full-backs around, Hector Bellerin is also an excellent player and capable of being world class one day.
O'Leary questioned why Manchester United didn't sign Coleman in 2013, following Alex Ferguson's retirement and when David Moyes was appointed.
"I can't believe a few years ago, particularly when Fergie went, Man United [didn’t sign him]. I thought he was absolutely spot on for Manchester United, the way they want to play, the way the lad plays. "There’s not many in Europe better than him in my opinion."

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