Fekir had been one of Liverpool's prime targets this summer as they looked to shore up their midfield and the club were willing to offer up to €55 million, plus another €5m in add-ons, for the France worldwide.
Speaking on Saturday afternoon, French Football Federation president Noel Le Graet even appeared to confirm that a transfer was on course to be completed imminently, as Fekir had passed his medical at France's national football centre.
The Lyon forward was said to be close to finalising his move to Anfield on Thursday night with an announcement due on Friday.
Fekir, who drawn keen interest from some of the top clubs in Europe this summer, including Bayern Munich and Arsenal, will become Liverpool's third high-profile signing for next season.
Liverpool have already signed Fabinho from Monaco for £43.7m this summer.
His form was nowhere near the level he reached in the 2016/17 season - he only scored two goals and laid on eight assists in the league in 30 appearances.
Who do you think Liverpool should chase as a Nabil Fekir alternative?
And on Saturday evening Lyon announced the deal was off, claiming their captain will remain at the club next season.
The collapse - for now at least - of Liverpool's move for Fekir will be a setback for Jurgen Klopp.
With Nabil Fekir-to-Liverpool all but done, Julien Laurens describes what kind of player he is and where he'd be best suited in Jurgen Klopp's XI.