Montreal's GM revealed that talks between Ballack and the club have stalled and the team is continuing to explore its options, including possibly signing Clarence Seedorf.
Montreal is determined to make a splash in the club's inaugural season and adding Ballack would generate global headlines, but nothing materialized after initial talks between the two sides ended a few weeks ago.
"We did make an offer to Michael. I think we were still not on the same page on that aspect and that's where discussions stopped," Impact general manager De Santis told Goal.com.
"We know that he's been busy with ESPN and the Euros coming. We did back off a little as well. We'll see what comes with that."
Speculation is growing that the former Chelsea and Bayer Leverkusen star will decide on his next club this week as he is set to make his debut as a commentator for ESPN on Friday. The team that the German international will announce is still unclear.
The Philadelphia Union have been the only other MLS team to express legitimate interest in the 35-year-old midfielder. As long as the New York Red Bulls have Rafa Marquez, they will not pursue Ballack and Chicago head coach Frank Klopas balked at reports suggesting that the Fire were interested.
"I have never had discussions with Michael Ballack or his agent," Klopas told Goal.com. "Our priority isn't at the central midfield spot."
Other major-market cities Los Angeles and Seattle both have the maximum amount of Designated Players with three each.
What has prevented MLS clubs with DPs slots open from signing Ballack has been his wage demands. It is rumored that Ballack wants a yearly income higher than Marquez, the second-highest earner in MLS with a $4.6 million annual salary.
Should Ballack decide against joining the Impact, the Canadian club is prepared to pursue a list of other targets headlined by four-time Champions League-winner Clarence Seedorf.
"Clarence Seedorf is one of them," Impact general manager Nick De Santis told Goal.com. "It's too early to say if there's a big reality to it.
"But he's a player that we feel because of where's he's played at and the level he's played at, along with the type of person he is, would present a lot of good things as a DP in Montreal."
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Seedorf has been linked to MLS for the past three seasons and just finished his contract with Serie A club AC Milan. While Ballack is a better all-around offensive player, Seedorf has developed into a strong defensive midfielder over the past few years and is better at set-piece delivery.
However, conversations with the former Netherlands international will likely only move forward if Ballack turns down Montreal. De Santis has ruled out signing both players.
"If both players say, 'Yes,' I can guarantee you that we aren't in a position to sign both," said De Santis, who added that signing a second DP isn't even a priority.
Those pesky Alessandro Del Piero rumors won't die for the Montreal Impact, despite multiple denials from the club. De Santis believes that the player's representatives are responsible for the recent reports and hinted that they might have regrets on how they negotiated last year.
"First, it's not him, it's his people," De Santis said. "Of course a player with his name and quality would have generated excitement. In the end, we did our due diligence to see a player's commitment and we didn't see that with him."
He added, "I thought we had good conversations but it was a bit discouraging to us last August when we got the call that his main interest was New York or Los Angeles."
Although De Santis maintains that the Impact are no longer interested, he hopes that the Juventus legend still decides to join MLS.
"Hopefully he will play in MLS and bring his level of play but for us that chapter is closed," said De Santis.