The president of Palmeiras, Luiz Gonzaga Belluzzo, said in a statement that the club was officially giving up on talks to secure Ronaldinho's transfer.
He blamed Ronaldinho's brother and manager, Roberto de Assis, for reneging on a January 2 deal he said they had sealed by trying to come back with a higher demand while pursuing talks with other clubs.
Gremio on Saturday leveled similar accusations against Assis as it, too, abandoned talks for Ronaldinho.
That left only one bidder in the race: Rio club Flamengo, whose president Patricia Amorim Saturday held talks with AC Milan vice president Adriano Galliani.
Galliani told media afterwards that there was a "99.9% chance" that Ronaldinho would sign with Flamengo.
The player's lawyers had only to go through the contract on offer, with the final details to be resolved "by Monday or Tuesday," he said.
The sporting daily Lance, however, said Assis cast some doubt on that deal, telling a Brazilian broadcaster that, so far, only Flamengo and Milan had spoken with each other.
"Flamengo hasn't spoken directly with us.... Ronaldo hasn't accepted anything, nothing," he said.
The player, whose full name is Ronaldo de Assis Moreira, started professionally with Gremio at age 18 before moving to Paris Saint-Germain, FC Barcelona and then AC Milan.
Twice elected best player in the world, Ronaldinho made it known that he wanted to return to his native Brazil with hopes of playing for a local side and on the national team in the 2014 World Cup the country is to host.
Milan agreed last Thursday to allow him to hold talks with Brazilian sides, though kept his contract, which runs to June, in force.