The Uruguayan has been linked with a move away from the Nerazzurri following his disappointing first season at San Siro, but now looks set to stay with the Serie A club
The former Atletico Madrid man failed to make an impact at the Nerazzurri after arriving in the summer of 2011, netting just two goals in 18 Serie A appearances.
Forlan has been linked with a move to Atletico Mineiro, and both clubs confirmed that there were negotiations over a possible transfer.
However, his father Pablo has all but ruled out a move away from the Giuseppe Meazza.
"For the time being there is no negotiation with any club," Forlan senior is quoted as saying on Inter's official website.
"As it is now, he will remain at Inter. He has one year left on his contract with the Nerazzurri."