O'Leary told the club's official website: "When I looked at this, I decided it was a deal that would benefit everybody. Norwich get an England Under-21 player who was attracting interest from a number of First Division clubs.
"We have a squad member who will now be getting regular first-team football, which will do him no harm.
"It also means players like Stefan Moore will get more opportunities to impress in the reserves. Hopefully everybody gains."