Matic's £40m move to Old Trafford caught many by surprise in the summer, with some baffled by the Premier League champions' willingness to help a perceived title rival strengthen their squad with one of their one star players.
The Serbia international has made a very encouraging start to life as Manchester United's midfield lynchpin, and Neville, who made 386 appearances during his time as United's utility player, cannot fathom why Chelsea would let a player of such quality join a contender for their Premier League crown.
"What's gone wrong for Chelsea? One word. Matic," Neville told BBC 5Live, relayed by Goal. "It's as simple as that. The minute they sold Nemanja Matic was a mistake.
"When you had Matic sat in front of you, alongside [N'Golo] Kante, there was protection. Whoever made that decision needs sacking. That is one of the poorest decisions I have ever seen in the Premier League.
"If you ask any of those Chelsea players who they would want back, they would say Matic. Chelsea replaced him with someone who is going to do the same job – [Tiemoue] Bakayoko is not that player, he is not a holding midfield player.
"They didn't replace Matic. I wouldn't have let him out of the building, I would have chained him to the training ground walls."
Chelsea did attempt to replace Matic with Tiemoue Bakayoko from Monaco, but the well-rounded midfielder has struggled to fill the void left by the Serbian as he attempts to acclimatise to his new surroundings. The Frenchman did start the season with a troublesome knee problem, and Neville, who won six Premier League titles during his time at Manchester United, does not think he is firing on all cylinders.
"I still haven't worked out Tiemoue Bakayoko," Neville said. "Since he has come to the Premier League, I haven't seen the player he was at Monaco. I have not seen the types of quality he was showing.
"He was the box-to-box powerhouse you thought he would bring to this team. There is definitely more to come from him. He looks at 50%!"