Middlesbrough boss Gareth Southgate has admitted the club will not be signing Robert Huth.
Chelsea's 21-year-old Germany international is understood to have failed a medical because of an ankle problem, and the Teessiders have dropped their interest as a result.
Southgate told the club's official website: 'It's a great shame for everyone involved that Robert won't be joining us at the present time.
'But I'm continuing to pursue a number of avenues towards potential new signings, though there's nothing concrete to confirm right now.'
Southgate reached a verbal agreement to sign Huth within days of his appointment last month, but had to wait until after the World Cup finals to attempt to tie up the deal.
The Berlin-born player arrived on Teesside on Monday for two days of medical tests, but it emerged on Tuesday evening that there was a problem.
Huth is now expected to return to Stamford Bridge.