The Everton defender suffered a double break of his right leg following a tackle by Wales' Neil Taylor in Friday's 0-0 draw in Dublin.
Ireland captain Coleman was given oxygen before being carried off at the Aviva Stadium and was taken straight to St Vincent's University Hospital before undergoing surgery over the weekend.
O'Neill said: “He had the operation yesterday (Saturday) morning at 8.30am, that was successful. He has realised everything that has happened and is obviously very disappointed.
“It will take some time to heal, it's a double break but it has been pinned up now and screwed in. I know the doctors and surgeons are all very, very pleased with the way the operation has gone and now it's time for recuperation.
“I saw him the evening of the injury, he was fairly groggy. It's a devastating blow for the lad, he was having a phenomenal season at his club and a phenomenal season for us as captain.”
No timescale has been put on Coleman's recovery but O'Neill has backed his mental strength to aid his comeback.
“I'm not sure, I would only be guessing,” said O'Neill, when asked how long Coleman could be out for on BBC Radio Five Live's Sportsweek programme.
“Even the doctors and surgeons wouldn't be terribly sure. Sometimes there are complications afterwards and injuries can be more prolonged, other times it can be clean and clear sailing.
“It will take some time but Seamus has great determination and sometimes those things work very much in your favour, in terms of recovery.”
Aston Villa defender Taylor was sent off for the tackle in the World Cup qualifier but, while clearly upset, O'Neill stopped short of completely rounding on the 28-year-old.
He added: “I've seen the challenge, I've seen the challenge (Gareth Bale's) on John O'Shea and they are very poor challenges.”
The draw in Dublin meant Ireland missed the chance to return to the top of Group D, after Serbia beat Georgia on Friday, with Wales four points behind in third.