"PSG have decided to withdraw from talks underway with AC Milan concerning the transfer of Thiago Silva," the Parisian club announced on their Twitter account.
"President (club) Silvio Berlusconi has decided: Thiago Silva stays at Milan," the Serie A side announced on their website at around the same time.
AC Milan vice-president Adriano Galliani flew to Paris Tuesday to open talks with PSG management over the eventual transfer of the 27-year-old to the Parc des Princes.
Reports said that PSG, now owned by Qatar Sports Investments (QSI), could pay the Italian giants 45 million euros ($56m) for Silva, who would receive a five million euro bonus as well as an annual salary of nine million euros.
PSG already hold the French transfer record having paid 42 million euros for Argentinian Javier Pastore last summer.
Silva joined AC Milan in January 2009 for 10 million euros and his contract expires in 2016.
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