Ally arrived in the village in February and has since embarked on a relationship with Amy Barnes, played by Ashley Slanina-Davies.
Hollyoaks bosses have previously teased that Ally is hiding a secret, which will become clear on screen in the coming months.
O'Connor told Soaplife of the upcoming revelation: "All I can say is that there's a very big, meaty storyline coming up for him and I'll be in the show at least until the end of this year."
Asked if Amy could be hurt by Ally's secret, he replied: "It would be nice if she wasn't, but this is a soap - and soaps need drama."
Hollyoaks fans see Ally and Amy's relationship progress later this month, leaving Ste Hay (Kieron Richardson) concerned.
O'Connor said: "I think Ste's feeling protective. Amy and Ally are having what's meant to be a romantic lunch, and Ste interrupts to ask Ally what his intentions are. Ally's a bit frustrated, but he understands why Ste feels he needs to look after Amy.
"He tells Ste he wants a committed relationship with Amy. He fell for her the first time he met her."
Hollyoaks airs weeknights at 6.30pm on Channel 4 with a first look screening at 7pm on E4.
> Hollyoaks star Dan O'Connor chats to Digital Spy
> Read more Hollyoaks spoilers and news