The Parkhead club issued a statement on Monday confirming that they are to close section 111 of their stadium, which houses the Ultras group, known, for the most part, for banner displays and singing.
However, among other things, warnings to stop "lateral movement of spectators" and "body surfing" went unheeded and consequently supporters will be offered a refund on their season tickets or the chance to relocate.
The Celtic boss is in Sweden for the second leg of their Champions League third qualifying round against Elfsborg, looking to defend a 1-0 lead from the first game.
When asked about the issue, he said: "It is very disappointing because I think that section adds hugely to the atmosphere at the stadium. But there was a final warning after the Cliftonville game and that wasn't adhered to and the club have taken this decision.
"It is beyond me, it is a club decision and it is a shame that has come to this. But there are lines of dialogue still open so I wouldn't say this is the end but there are rules and conditions and it is all about safety at the end of the day, that is paramount to the club."
The former Celtic skipper admitted having a pep-talk with defender Kelvin Wilson, who has been reportedly subject to two failed bids from his former club Nottingham Forest.
Asked if the Englishman, who has recovered from shin splints, had asked the club for a move, Lennon said: "Certainly not to me, maybe to the club, but not that I'm aware of at the minute.
"Kelvin is here and in contention. I spoke to him yesterday. I am not going to discuss what I said privately to the player, that is between me and him.
"He is aware of what we think of him and he knows the situation and what lies ahead of him. He is quite calm, he is that type, if he is picked and he is ready to play I am sure he won't let us down.
"There is no getting away from the fact that there is genuine interest from a club in England but I don't want to discuss any of the players' situations or conditions until after the game tomorrow night.
"He has been magnificent for us, certainly in the European games. He had a good season last season and he has started the season very well so he is as important as some of the other players like Samaras, (Joe) Ledley and (Scott) Brown."