Alexandre Pato has scuppered Paris St Germain's hopes of landing the Brazil forward by announcing that he is staying with AC Milan.
Earlier in the day sources at the French club claimed PSG had reached agreement to sign the 22-year-old.
PSG, who have also signed Barcelona's Brazilian star Maxwell, had tabled a €28m bid, with an additional €7min possible bonuses. However, Milan released a statement detailing the player's intention to stay in Italy.
"Alexandre Pato will stay in the red and black shirt, the striker has decided to continue his young, splendid and winning career with Milan," said the club statement.
Pato, who is dating Milan owner Silvio Berlusconi's daughter Barbara, added: "Milan is my home, I didn't want to interrupt my career in red and black after having won my first two trophies in this shirt.
"I want to help write the story of Milan and contribute to the future success of this club with happiness and in perfect harmony with the whole environment. This joy will give me the motivation to approach future games with maximum enthusiasm and the desire to win and score goals."
"Today is a special day for me. I want to thank the president Berlusconi, the club and the fans who have always believed in me."
PSG had offered Pato a three-and-a-half year contract reportedly worth between €6 and €7m a season.
The forward's agent was expected in Paris on Friday to finalise the deal which would have seen him rejoin former Milan boss Carlo Ancelotti, as well as sports director Leonardo, who also used to coach Milan.
Pato was expected to make way for the imminent arrival at Milan of Manchester City's wantaway Argentine star Carlos Tevez. Indeed, Milan chief executive Adriano Galliani travelled to England on Thursday in a last-ditch effort to sign the former City captain.