Dundalk head coach Vinny Perth. Photo by Stephen McCarthy/Sportsfile
City boss Higgins was quoted as saying: "I'm really looking forward to working with Patrick again and we are delighted to be bringing one of the best players in the country back to his hometown club."
The timing of the announcement drew a furious response from Perth who had finished conducting press duties after a 4-0 win over Welsh side Newtown when the news broke and had to be asked for fresh comment.
"I think it’s a complete and utter lack of respect for this football club," said Perth.
"The wording of it is disgraceful and it’s trying to unsettle this football team and I won’t let anyone unsettle the football team that I’m working with. I just think it’s completely disrespectful.
"The people in Derry are good people but I’m just shocked by it and I thought particularly the manager (Higgins) would have known better. He has done very well out of this football club for a long time."
Higgins was assistant to Perth until he left to join Stephen Kenny's backroom staff when the Ireland manager took over from Mick McCarthy.
But he left the FAI to return to Derry in April, signing a three-and-a-half-year deal, and bringing local players back to the club was high on his priority list.