South Melbourne claim “terms were agreed” with Didier Drogba before a delay in the bid process led the former Chelsea striker to walk away from discussions.
The Ivorian is currently a free agent after leaving Montreal Impact at the end of the 2016 MLS season.
He has expressed a desire to continue his playing career at the age of 38 and has had various options to consider.
A potential move to Australia was put to him, with positive talks held.
South Melbourne are waiting on the Football Federation Australia to grant them permission to join the A-League, though, and were ultimately unable to offer Drogba top-flight football until 2018-19.
That has led the experienced frontman to look elsewhere, with Brazilian side Corinthians waiting on a response to an offer they have tabled.
South Melbourne advisory board chairman Bill Papastergiadis told The World Game: “We were pretty close.
“Terms were agreed but where we had difficulty with keeping him interested during the period in which we could not play in the A-League, assuming we are successful in our bid.
“The bid process is unclear because FFA have not released the criteria for entry. Originally that was going to be in February but I don’t know when that is going to happen for sure.
“But if we were to get in we couldn’t play until the season after next. Drogba basically said: ‘I like it but what I am going to do in the interim for a year?’
“We had everything in place, other than that. It’s a pity that we couldn’t bring him here to join us, but he is too much in demand to sit idly by for a period of time.
“Drogba’s still at an age where he can compete – and he would have been great at A-League level. And we are still very much in market for a marquee of that kind of stature.”