Arsenal have been dealt what could prove to be one of the biggest transfer setbacks of the summer.
According to Sky Sports, Vinicius Junior will be staying at Real Madrid beyond this summer.
The La Liga outfit have no intention of selling him and are confident he will agree to a new contract.
Arsenal had been seriously exploring the possibility of signing the Brazilian superstar as manager Mikel Arteta looked to transform the left side of his attack.
With Vinicius entering the final year of his contract, the Gunners believed a rare opportunity had emerged to tempt him away from the Santiago Bernabeu.
The Gunners viewed him as their number one target and were also prepared to offer him the biggest contract in their history.
Despite already earning around £400,000 per week in Spain, the North London club were willing to improve those terms in an ambitious bid to bring him to the Emirates Stadium.
Vinicius bagged 22 goals and 14 assists in 53 matches across all competitions last season.
Arteta wants an elite left winger added to the squad after the departure of Leandro Trossard. Gabriel Martinelli is also up for sale.
Although Christos Tzolis has already arrived, the Greek international is widely expected to provide squad depth rather than become an automatic starter.
Arsenal were also strongly interested in Morgan Rogers, but Chelsea ultimately won the race for the England international.
Missing out on both Rogers and Vinicius would represent a significant disappointment, but Arsenal now need to respond quickly and secure another signing before the window closes.
Stats from Transfermarkt.com