The 22-year-old is relocating back to Sydney after making 34 appearances for the Seagulls and will fly home after the club's EVO-STIK League North fixture at Ramsbottom United next Tuesday night.
The Seagulls reacted quickly to Wednesday's news of his imminent depature to bring in young central defender Billy Sass-Davies, pictured below, as cover on a month's loan from League Two Crewe Alexandra.
The 6ft second year scholar at the Crewe Academy has already been on the first team subs bench this season and the 17-year-old will be in the squad for Saturday's home game against Brighouse Town providing his international clearance comes through.
South African-born Collins moved to North Wales from Sydney in 2014 and was with the Wrexham Glyndwr Football Academy before joining Colwyn Bay, initially on loan, last season.
After seeing AFC Fylde midfielder Tom McCready extend his loan deal at Llanelian Road by a further month on Tuesday for a series of crucial clashes in the battle for the play-offs, Bay boss Alan Morgan wished the departing Collins well in a club statement.
Morgan said: "Dan will be a huge loss. Since I've been here he has been tremendous and we are very sorry to see him go, but wish him all the very best for the future."
The Seagulls again look likely to be without frontman Danny Bartle for the weekend's fixture that could see Morgan's side climb into the top six on goal difference if results elsewhere go their way after he tweaked the medial ligament in his knee. The Bay boss does have Jamie Rainford back in contention after he returned from a month's loan at EVO-STIK League North rivals Droylsden in time for the big match.
Images courtesy of @ColwynBayFC/Twitter
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