Last week, media reports suggested that the Brazilians were keen to sign the Venezuelan forward as a direct replacement for Leonardo Castro.
It was further reported that a possible swap deal could be struck, with Paez used to sweeten the deal that would see Castro join the Glamour Boys.
However, according to an impeccable source within the Amakhosi camp, there was never a proposal for Paez to move to Sundowns during the negotiations which were finalized on the weekend between Sundowns and Chiefs.
Chiefs announced on Saturday that they had reached an agreement with Sundowns for the services of Castro.
Castro will join Amakhosi as soon as the mid-season transfer window opens in January, six months before the expiry of his contract with the Tshwane giants.
"Paez was never part of the deal. His name never came up during the talks," the source told Goal.
Furthermore, the source revealed that Chiefs are actually looking to offer Paez a new contract even before his current deal expires in 2019.
"You'd remember that Paez signed a two-and-a-half-year deal with Chiefs in January. The club is actually looking to extend his contract," added the source.
Paez has netted eight goals in 35 official matches he has played for Amakhosi since arriving at the start of the year as a free agent.
He remains an integral member of Steve Komphela's team, with 17 matches in all competitions under his belt so far this season.