Sydney - Wallabies sensation James O'Connor quit Vodacom Super Rugby side Western Force on Wednesday after negotiations over a new contract broke down.
The 20-year-old back, one of Australia's brightest new stars, will reportedly link up with fellow Wallaby young gun Kurtley Beale at the Melbourne Rebels.
His shock departure came a week after RugbyWA was advised by his representatives that O'Connor had decided in principle to sign a new deal with the Force.
But the Super Rugby club said they have now withdrawn from nearly five months of talks after failing to agree on the length of a new contract and how much he would be paid.
"We presented James with extremely generous terms which reflected his talent and standing at the Western Force," RugbyWA chief executive Vern Reid in a statement.
"We were fully committed to giving James every opportunity to continue his development through the rugby program in Western Australia, however it is clear his final decision has been based on other factors.
"We're still a young club and it is fundamental in our development that everyone is committed to building a cohesive culture that defines a team ethos.
"The terms being imposed by James' management did not correlate with that objective."
O'Connor became the youngest player to debut in Super Rugby history, at 17 years of age.
He has played 27 Tests for the Wallabies so far and will be a key member of Robbie Deans' squad at the World Cup in New Zealand this year.
Reports said the Rebels were waiting for the Australian Rugby Union to sign off on the deal before making an announcement on luring one of rugby's hottest prospects to Melbourne.