Ryan has been on a central contract with the Irish Rugby Football Union since 2014-15 but has not been offered a new national deal.
And the back row is now poised for a move to France, with Erasmus conceding Munster cannot compete with the money Racing are able to offer the 33-year-old.
“I’m disappointed for us but I think we have to be happy for Donnacha [Ryan] if that’s what he wants to do,” Erasmus said.
“Obviously he didn’t get a national contract again. We offered him a two-year deal but as I understand he’s got a much better offer from Racing.
“I guess in the next few days we’ll know exactly where he stands. Obviously it would be a great loss for us, he’s one of our stalwarts and really a Munster man so it will be sad.
“He’s served Munster well and I guess at his age he’s got one big contract left in him. We made the best offer we could, which was for two years.
“He didn’t get a national contract again so it was tough for us to afford him and when the likes of Racing and those guys make you offers it’s really big money which we can’t compete with.
“So it’s really sad on one hand and we’re really going to miss him but we’re happy for him.”
Erasmus allayed speculation over his own future at the club, amid reports he could return to his native South Africa.
“I worked and lived in South Africa as a coach for 16 years and I speak to them weekly, on a formal and informal basis, but at this stage I have a full contract which is three years and it’s just speculation,” he added.
“I’m big friends with the current coaches and management team. There’s been formal and informal chats the past few months. Some have been requests, some have been pure chats.
“I’ve got a contract with the IRFU and nothing’s changing.”
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