Sportal.de reports that the Spurs transfer target has committed his future to Bayern Munich for next season.
Tottenham were believed to be leading the race to sign the Croatian international, but Halilović's father was reportedly blocking the deal.
He was believed to be unhappy with Tottenham's plans to play Halilović in the club's development squad for at least the first season.
And reports now claim Bayern Munich boss Pep Guardiola has swooped to tie up a deal for one of world football's hottest properties.
The 17-year-old playmaker made his Dinamo debut in the Champions League aged 16, and is already a full Croatia international.
Spurs reportedly offered up to €20m (£17m) to bring the talented youngster to White Hart Lane, but it looks like he could be off to Bayern Munich instead.
If that is the case, he faces a real battle to get in the team - with Guardiola able to call on Thiago Alcantara, Toni Kroos, Xherdan Shaqiri, Thomas Muller, Mario Gotze, Franck Ribery and Arjen Robben in attacking midfield positions.