The Rossoneri had been hopeful of signing the Serbia international, who is in the final year of his deal, but the collapse of Robinho's proposed return to Santos has changed things
The Rossoneri had been hoping to sell Robinho to Santos in order to fund a move for the 21-year-old Serbia international, who has just one year left remaining on his current contract with the Viola.
However, the collapse of Robinho's proposed return to Brazil has effectively scuppered Milan's plans to lure Ljajic to San Siro, with any deal likely to cost in the region of €10 million (£8.6m) for a player whose current deal expires next summer.
"It's no longer a practicable deal," the Rossoneri chief told Sky Sport Italia. "Yes, his idol is [former Milan ace] Kaka but we already have Robinho, who is staying."
Still, Galliani does not believe that the failure to land Ljajic is a major setback, given Robinho is in fine fettle ahead of the new season.
"We're talking about a great professional, as well as a great champion," he argued.
"I have spoken with [Milan coach Massimiliano] Allegri and he told me that 'Binho' is really very fit, is working well and that he is preparing in the best way for next season."
Despite this, though, Galliani did leave the door open for the possible early arrival of another attacking midfielder at San Siro, Keisuke Honda of CSKA Moscow.
"He will very probabably become a Milan player in January," he explained. "Could he arrive before then? It's improbable but not impossible ..."