The EADT and Ipswich Star understands the Bees made multiple offers for the 22-year-old attacker, culminating in a bid of £35m, the value of the clause, not long before its expiry at 5pm.
However, the proposed structure of the deal did not meet the terms of the release clause and now the deadline has passed.
It's understood that Ipswich are very much determined to keep hold of Hutchinson for a targeted Championship promotion push.
Brentford may well test that resolve, however, if they return to the negotiating table. The West London club are currently trying to thrash out the big money sale of star right-winger Bryan Mbeumo to Manchester United and could be in a position to offer more money up front once that deal is concluded.
Hutchinson is currently on holiday, having been afforded some extra time off due to his involvement in the recent European Under-21 Championships. As it stands, he is the club's only fully fit right wing option due to the fact that Wes Burns (knee) is sidelined until around October and Chiedozie Ogbene (Achilles) and Jaden Philogene (knee) are both building themselves back up from significant injuries.
Speaking in early June, Town chairman Mark Ashton told the EADT and Ipswich Star that player retention was key this summer, adding: "We haven't got to sell a multitude of players, but one or two players will be traded out to give ourselves that headroom and the ability to move forward.”
Top-scorer Liam Delap subsequently departed for Chelsea after a £30m relegation release clause was triggered. Defenders Axel Tuanzebe and Cameron Burgess both rejected new contracts to join Burnley and Swansea respectively on Bosman free transfers, while it's understood that influential captain Sam Morsy, now in the final year of his contract, will be allowed to leave on a free transfer to join Kuwait SC.