The veteran midfielder has now joined Coca-Cola League Two side Darlington after a short-term contract at Elland Road was not extended, while winger Steve Guppy also left in similar circumstances.
Hignett said: "I had verbally agreed a year but there was a board meeting and they decided they're not going to release the money for me. It came as a bit of a surprise to me and Gupps got the same phone call but the manager's hands are tied. He's low on numbers.
"Once I knew what was happening with Leeds, I got in touch (with Darlington) and it didn't take long to sort out."
Hignett said: "I had verbally agreed a year but there was a board meeting and they decided they're not going to release the money for me. It came as a bit of a surprise to me and Gupps got the same phone call but the manager's hands are tied. He's low on numbers.
"Once I knew what was happening with Leeds, I got in touch (with Darlington) and it didn't take long to sort out."