Club president Enrique Cerezo has ruled out a move for the Wolfsburg midfielder, who spent 2011-12 on loan at the Vicente Calderon
The Brazilian playmaker enjoyed a successful loan spell in the Spanish capital in 2011-12 after falling out with former Wolfsburg coach Felix Magath.
However, he has since been closely linked with a permanent move to the Vicente Calderon but Cerezo has ruled out a transfer.
"I said a while ago that it was difficult to have Diego playing for Atletico next season,” Cerezo told reporters.
“And now I say that it is impossible."
“We do not have any plans for his signing, but a lot of time remains until the end of August. If there is a need or a problem with a player, it will be taken into account.
"Today, the squad today is closed. If anything happens, it will be under exceptional circumstances.”
Atleti have added Spain star David Villa to their ranks this summer and Cerezo is looking forward to seeing the former Barcelona and Valencia man in action.
“Villa has been a great deal for Barca, Atletico Madrid and for the player," he said.
"He is a great player and I hope he is with us for many years. I have always said that players should play where they want to.
“He had offers from England and Italy and he has opted to play in Spain.”