Sunderland manager Paolo Di Canio has revealed that defender Gino Peruzzi is unlikely to join the club.
On Monday, it appeared full-back Peruzzi was set to move to the Black Cats from Velez Sarsfield, with personal terms having reportedly been agreed.
However, the discovery of a previous ligament injury during his medical sparked concerns, and Sunderland sought a second round of tests.
Velez released a statement on their official website, which said: "After agreeing contractual terms, the player underwent a medical examination. The professionals found repercussions from the torn ligament Peruzzi suffered last April, which prompted a three-week absence from games.
"To obtain further information about the injury and its progress, they made contact with Dr Ricard Coppolechia, who answered their questions.
"After this, Sunderland requested permission to subject Gino Peruzzi to a final evaluation at the Clinica Deportiva Villa Stuart in Rome. The evaluation had a positive result, with Prof Mariani recommending specific work on the affected muscle area.
"Our club's entourage returned to Argentina on Sunday, anticipating that Gino Peruzzi will travel to England again in the coming days."
But Di Canio has said a deal is no longer in the offing.
“At the moment, there is no chance for Gino Peruzzi to join us,” he told the Sunderland Echo. “My club is not a club that can sign players with some problems.
“We are not Manchester City, who can think about buying a talented player with an injury and wait for him.
“We are not very late [in the transfer window], but I would like a player ready to join the rest of the group, because the process of integration is not just physical. They have to understand how we play, which is not easy.”
The news leaves Sunderland still short at full-back, following the news that another defensive target, Lazio’s Luis Cavanada, had agreed a four-year-contract extension.