With the 2014 FIFA World Cup just 18 months away, Neill, 34, is on the lookout for a new home with Pro League outfit Al Wasl reportedly recruiting Iraq defender Ahmad Ibrahim to replace him on loan until the end of the season.
Neill played in Al Wasl's last outing - a 1-0 home loss to Al Nasr - by way of preparation for Wednesday evening's (Thursday morning AEDT) friendly against Romania in Spain.
Osieck said of his predicament: "It's definitely not a positive development. It's a thing that affects him but down the road it also affects the national team.
"A player has to be in a regular playing rhythm and have a regular schedule and I hope he can resolve his situation pretty quickly."
Osieck stopped short of advising the ex-Millwall, Blackburn Rovers, West Ham United, Everton, Galatasaray and Al Jazira defender to turn to the A-League as the latest destination on a long and winding career road.
"I would just say to him that he needs to be playing regularly. It doesn't matter where it is," he explained.
Osieck vowed to give Neill game time against the 33rd-ranked Romanians despite him being suspended for the World Cup qualifier against Oman in Sydney on 26 March.
But it's likely he will also have look at Middlesbrough's Rhys Williams and Shandong Luneng's Ryan McGowan alongside his captain - with both possibly pencilled in for roles against Romania.
"I will give a couple of the guys the opportunity to play. The reason that Lucas Neill is here even though he's suspended for Oman is that we had a couple of exits in the central defence and in order to build a new group you need to have experience you can build around," said Osieck.
The race for the left-back spot is warming up also with the Dutch-based duo of Michael Zullo and Jason Davidson both in camp and Turkey-based Aziz Behich also in the picture.
"We have had other options in recent games. Aziz has done okay and also looking at these two here is going to be useful," said Osieck.
With midfielders Mile Jedinak and Carl Valeri out injured, Australia Wien's James Holland is ready to boost his growing kudos in midfield.
"He did very well against South Korea and is a player on the way up," Osieck said. "He's a regular for his club and they are top of the table. He's had a long apprenticeship and he should be ready by now to really make our team."
Osieck said of the test against Romania: 'They offer good challenge to us. They have named a strong squad and this gives me a chance to assess out players. I wanted to particularly have a look at the two players who dropped out through injury because they have been playing well for their clubs (Tommy Oar and Jedinak) but this is not a wishing well."
Leaving aside the East Asian Cup qualifiers, Australia is coming off the back of a hard-earned 2-1 win against Korea Republic and Osieck believes competition for places is intensifying.
"That's what I have seen," he said. "The boys have been trying really hard to impress. Those players who are here have to consider that they still have to qualify for the World Cup. They cannot take anything for granted."
Romania has won four of its last six games, with the 1-0 win in Turkey in a World Cup qualifier and the 2-1 success over Belgium, in a friendly, underlying its resurgent power.
It lies third in European Group D qualifying for the World Cup, lagging leader Netherlands but only adrift of second-paced Hungary on goal difference.
The group winner goes straight to Brazil with second spot leading into the play offs.
Coach Victor Piura fielded a side of home-based players for last weekend's friendly against Poland, also in Malaga, and got burned with Romania crashing 4-1.
Talismanic striker Ciprian Marica (Schalke) and Adrian Mutu (Ajaccio) will be absent against Australia along with Roma goalkeeper Bogdan Lobont.