Alex Ferguson was ready to make Tevez one of the
highest earners at Old Trafford after he agreed a £25.5million
fee.
But after lengthy negotiations between United chief
executive David Gill and Tevez's advisor Kia Joorabchian, the deal
fell through.
A United statement said: "Following contact received
from Carlos Tevez's advisors last night, in advance of the deadline
the club set for concluding negotiations, Manchester United
announces that Carlos will not be signing a new contract with the
club.
"The club agreed to pay the option price of £25.5m and
offered Carlos a five-year contract which would have made him one
of its highest paid players.
"Disappointingly however, his advisors informed the
club that, despite the success he has enjoyed during one of the
club's most successful periods, he does not wish to continue
playing for Manchester United.
"The club would like to thank Carlos for his services
over the last two seasons and wishes him good luck for the
future."
United's bitter rivals City are now the clear
favourites to sign Tevez.
City boss Mark Hughes is on the verge of an £18m deal
for Blackburn's Roque Santa Cruz and have also been linked with
Barcelona's Samuel Eto'o.
Hughes has already wrapped up a £12m move for England
midfielder Gareth Barry.