Sky Sports News sources understand Andrei Arshavin is heading back to a London airport following the breakdown of talks with Arsenal.
The Gunners have been tracking the Zenit St Petersburg playmaker throughout the transfer window and Arsene Wenger had been hopeful of completing a deal before Monday's 5pm deadline.
The Russian, who starred for his country at Euro 2008, flew into England over the weekend ahead of final negotiations.
Arshavin was also expected to undergo a medical but it now appears as though Arsenal could miss out on his signature.
It is believed that Arsenal are reluctant to meet the 27-year-old's wage demands, even though Wenger feels he could bring a new dimension to his side's attack.
Arsenal have fallen ten points off the pace in the Premier League title race and have drawn their last two games.
Arshavin has made no secret of his desire to clinch a move away from Zenit St Petersburg and has previously been linked with Barcelona, Tottenham and Manchester City.