Sancho was United’s number one target for a summer rebuild, and they were willing to pay Borussia Dortmund up to £100m for the 19-year-old.
But United’s recent performances, ending up sixth in the Premier League table, have ended any prospect of a deal. United will be playing Europa League football again next season, entering at the second qualifying round in late July.
There are now major reservations on the side of the player whether Old Trafford would be the right environment for his development.
Barcelona, Real Madrid and Paris Saint-Germain are still interested in signing Sancho, who has been instrumental in taking Dortmund to second place in the Bundesliga this year. They are now weighing up whether to offer the £100m that he would cost.
But the news is a setback for Ole Gunnar Solskjaer’s hopes to add more young, fast players to United’s squad for next season.
The acquisition of the England international would have been a major statement by United given that he left rivals Manchester City in 2017 to move to Germany in the pursuit of regular first-team football.
United have now turned their attention to Swansea City’s Daniel James.