O'Keefe joined Lincoln in July 2010 and made 51 appearances for the club
Midfielder Josh O'Keefe and defender Adam Watts have left Lincoln City by mutual consent.
O'Keefe and Watts, who are both 23, were signed during Chris Sutton's reign as manager but had recently been made available for loan by current Imps boss David Holdsworth.
: "They're good lads but their futures are elsewhere.
"It's all about the bigger picture. Sometimes you have to step back to take a step forward."
O'Keefe, who signed a new two-year deal in May 2010, made 51 appearances for the Imps while former Fulham man Watts played 55 matches for the Blue Square Bet Premier club.
But the pair had fallen out of favour with Holdsworth and both are understood to have
rejected loan moves to Blue Square Bet North clubs
in the week before Christmas, to the frustration of the Lincoln manager.
Holdsworth added: "It's about taking the club forward and we must deal with it that pragmatically and bring competition in places where we need it.
"We need a strong backbone and I'm looking to develop that and you have to make changes sometimes."