On Saturday, the Legia Warsaw starlet appeared certain to join the German champions, but just over 24 hours later the deal has collapsed due to a dispute over the transfer fee
It emerged last week that the Bundesliga champions were in talks over signing the Legia Warsaw midfielder, who has been included in his country's squad for Euro 2012.
However, Wolski's representative, Maik Barthel, has now confirmed to Goal.com that the proposed transfer has collapsed.
It was reported that Dortmund were willing to hand over €4.5 million for the 19-year-old, but according to Sport-Bild, his current employers were holding out for €6m.
"We can very much understand Dortmund's view that Legia have requested an unrealistic sum for Rafal," Barthel said.
Wolski is considered one of the most exciting young talents to emerge from Poland in years. He made his national team debut in the 1-0 win over Latvia on May 22 before collecting his second cap in Saturday's 4-0 win over Andorra.