Amakhosi announced last week they had agreed a new deal with Shabba, who recently underwent trials at English Championship side Crystal Palace.
However, the playmaker's agent was quick to dismiss the Chiefs statement, claiming his client's future was most likely in England.
Speaking to Chiefs official website, team manager Booby Motaung said: "We had an agreement with (Tshabalala) through his manager, Jazzman Mahlakgane, that the player will sign a contract extension on Monday. It is unfortunate that the manager, through the media, contradicted the agreement.
"The deadline was not met on Monday. The club then communicated with the player's manager that the deal was off the table.
"Subsequent to this, the player requested a meeting with the executive chairman (Kaizer Motaung) on Tuesday. He requested that the club give him three days to think over his future and the executive chairman acceded to the request."
Tshabalala's current contract at Naturena expires in June, meaning the Bafana Bafana midfielder could make the move to Palace as a free agent at the end of the season.