Arsenal target Aron Johannsson has extended his current contract with AGF Aarhus, and will remain with the Danish club until June 2015, reports Sky Sports.
The 21-year-old winger had entered the final year of his previous deal, alerting the attention of a number of different clubs, but has now quashed all speculation about his future, by signing a new deal.
Gunners boss Arsene Wenger was believed to be interested in bringing the Icelandic star to the Emirates Stadium, and was ready to open negotiations with him about a free transfer move to north London when the window reopens in January.
However, any hopes Arsenal had of securing Johannsson's signature have been dashed after the player put pen to paper on a new three-year deal at NRGi Park.
"I never doubted the fact that it is best for me to continue at AGF," he told the club's official website. "This is what I have wanted for a long time, so I am very happy that we have managed to come to an agreement.
"I have developed well during my stay at AGF and I hope to continue my development. The coach and the club have shown a lot of faith in me and I have faith in the coach and the club.
"My focus has always been to stay at AGF and I just hope to be able to continue the good form that the team is in."
Johannsson has been in scintillating form in the early part of 2012/13, and his agent, Magnus Agnar Magnusson recently admitted his client was flattered to be linked with a move to the Premier League.
But, after committing his future to the Danish Superliga side, Arsenal will now have to pay a fee if Wenger is serious about adding him to his squad.