The former England international was rumoured to be interested in a switch to the A-League, having struggled to gain a spot in the first team at the Britannia Stadium due to a mixture of fitness trouble and the good form of Tony Pulis' men.
But, after there were strong links drawn between Glory and Owen, the Perth club have now dismissed a possible move.
"Michael is a player who comes with a high pedigree but it's not the direction I want to take the club," Perth coach Ian Ferguson said in a statement.
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"I am looking for a younger player and a player who has been playing more regularly.
"I have three or four irons in the fire that I am pursuing, which is good.
"In terms of Michael, there was contact from an agent if we were interested, it was discussed at a good level, but I have made the decision he is the not the player needed at Perth Glory."
Glory had previously expressed their interest in signing Owen in the January transfer window, though the club have now backtracked on their initial preferences.
The statement comes shortly after Glory made a swoop for former MLS star David Beckham, but their attempts to land the ex-England international are unlikely to come to fruition.