City thought a deal had been agreed for Tevez, 27, to join Corinthians for £40m having told the Premier League club he wished to return home to South America.
Manchester City have agreed to pay out £38million for Atletico Madrid’s Argentina striker Sergio Aguero on the same day the man he will ultimately replace saw his dream of a move back to Corinthians collapse.
City has targeted the 23-year-old as the successor to compatriot Carlos Tevez at the club, and they finally agreed to match the release-clause figure in his contract.
But Corinthians said there was not enough time to complete the move before the Brazilian transfer window closed.
Corinthians said they still wished to sign Tevez in the future and hoped an agreement could be reached in January.
The transfer window in Brazil ends at 0400 BST on Thursday.
"The board of Sporting Club Corinthians hereby officially announces the impossibility of hiring the Argentine striker Carlos Tevez," said the statement.
"While acknowledging the efforts of Manchester City and all involved in the negotiation, more time is needed for the transfer to be achieved, given that the window to sign players from abroad closes on Wednesday, 20 July [Brazilian time].
"We are aware of the dream our fans had of having this player at Corinthians again and we look forward to him being with us in the near future."
That would indicate that Corinthians could look to revive the deal in January, although that would not be Manchester City or Carlos Tevez's preferred option.
Tevez originally asked City for a transfer in December and the striker has constantly reiterated his desire to leave Eastlands so he can be closer to his family in Argentina.
But there are few clubs who can match City's asking price of around £40m.
Corinthians move for Tevez - which emerged on Monday - was believed to be funded by a new television deal for Brazilian clubs.
But the Sao Paulo side's response to City's demand for a proper payment schedule on Tuesday was perhaps a sign the transfer would not have gone smoothly even if it had gone through.
The breakdown of Tevez's move to Corinthians also leaves Manchester City's proposed move for Atletico Madrid striker Sergio Aguero in doubt.
Tevez, who in contracted to Eastland’s until 2014, has been a key player for Manchester City since joining from neighbors United in 2009.
The Argentine helped them to FA Cup success and Champions League qualification last season. He has scored 43 Premier League goals in his two seasons with the club - the highest total of any player in the top division.
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