Hull's proposed sale to a consortium from China and Hong Kong is off, BBC Radio Humberside understands.
Hull were put up for sale in 2014 by owner Assem Allam after the Football Association turned down his request to change their name to Hull Tigers.
An agreement to sell to a group led by Dai Yongge and Dai Xiu Li was reported to have been struck a fortnight ago.
That deal has fallen through amid speculation they do not meet the FA's fit and proper person test.
"As I understand it, the problem is not Hull City on the takeover being off," said BBC Radio Humberside's David Burns.