During an interview with the Shared Ireland podcast, the deputy first minister described the departing pair as friends after they announced their intention not to contest the 2022 Assembly election for Sinn Féin.
The MLAs had been asked to “consider their positions” as part of a review following two poor elections for Sinn Féin in Derry.
Ms Anderson, a former IRA prisoner, later described the party recommendation for her to stand down as a “body blow”.
In a dramatic intervention her family later accused Sinn Féin of “publicly humiliating” her.
In statement issued through her sister’s social media accounts they appealed for help to “correct what we believe is a massive miscarriage of justice” adding that “the British could not do to our Martina what her comrades and friends have done”.
They claimed she was being forced to stand aside over “problems that were not of her making” after giving her life to republicanism.
“We as a family have watched her put it in front of everyone and everything,” they wrote.
“Indeed, our Martina gave everything to the Irish republican struggle, including her biological clock.”
Asked about the two MLAs, Ms O’Neill described them as “both first class representatives of the party and always have been”.
“But first and foremost they are activists and they have always worked very hard to build they party and will, no doubt, have a role in that into the future,” she said.
Ms O’Neill claimed her colleagues had not been pushed aside.
“So, they weren’t sidelined,” she said.
“I mean, obviously the party in Derry said that we needed change and change then was what we set about bringing,” she said.
The Mid Ulster MLA added: “So, whenever you do your review work you can’t, you have to come at it holistically, you have to say, well, if things are broken you have to fix them.
“And so I think that in terms of the change, you needed to demonstrate change, and that’s what the public will now see.”
Ms O’Neill went on to say she will maintain good relations with the outgoing pair in the future.
“So, both Karen and Martina, as I said, they are great girls, they are my friends and they will be in the future,” she said.
“But I think they both realised even also that change was required,” she said.Ms O’Neill said that both women will still have a part to play in the future.
“They have always been there and they will always be there,” she said.
Both Ms Anderson and Ms Mullan were co-opted into the Assembly to replace Raymond McCartney and Elisha McCallion respectively.
Mrs McCallion, a niece of Martina Anderson, lost the Foyle Westminster seat in 2019 by a landslide 17,000 votes to SDLP Leader Colum Eastwood.
At the same time, Sinn Fein also lost five seats on Derry City and Strabane District Council as the party lost its political grip on the city.
Two names mooted as possible replacements are Fiachra McGuinness, the son of the late Martin McGuinness and Councillor Conor Heaney, a former SPAD to Mr McGuinness in the Stormont Executive.
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