Red Bull advisor Dr Helmut Marko has confirmed that the team will not be running Mercedes engines.
The German manufacturer was thought to be one of the options being considered by the former constructors' champions, as they reportedly look to replace Renault after a poor season.
However, Marko has revealed that Red Bull will need to look to another provider for a new power unit.
He told Bild: "The idea of Mercedes is finished. We are now focusing elsewhere."
Mercedes have decided against a partnership with Red Bull as they fear making a strong team more competitive, according to BBC Sport.
It is thought that the Silver Arrows are also concerned by what they see as a history of difficult relationships between Red Bull and other suppliers.