Valencia midfielder Miguel Angel Angulo has performed a u-turn and will not now be joining Arsenal.
Arsenal had agreed a £3.5m fee for the 27-year-old and the player looked set to complete a move to London on Tuesday.
But Angulo had a last-minute change of heart and is expected to sign a four-year deal to stay at Valencia.
Valencia president Jaime Orti said: “The player passed the first part of a medical but it looks as though he has decided to come back.
“We will sit down and talk with him about the present and future on Tuesday. We don’t know the exact reasons for his decision but we will welcome him back and all hope he will stay with Valencia.”
And Valencia boss Claudio Ranieri added: “It’s like the return of the prodigal son.
“I’m very happy because he’s a very professional player and is important to Valencia. He was unsure about the move and I said that he should go with his heart and it appears as though his heart told him he should stay.”