A £40m deal was thought to have been agreed by the two clubs but the South American side found problems with the payment structure City proposed.
The Timao now claim that there is not enough time to sign the 27-year-old due to the closure of the Brazilian transfer window at 4am BST on Thursday.
A club statement read: "The board of Sporting Club Corinthians hereby officially announce the impossibility of hiring the Argentine striker Carlos Tevez."
However, the current Brazilian league leaders are still hopeful of signing the 27-year-old in the January transfer window.
"We are aware of the dream our fans had of having this player at Corinthians again and we look forward to having him being with us in the near future."
The forward had a previous spell with the club from 2004 to 2006 before a move to England, where he has played for West Ham United, Manchester United and current club Manchester City.
The Argentine international has made it clear he wants to leave England and return to South America to be closer to his two daughters.