Earlier reports had suggested the Premier League champions were confident of enticing the German international away from the Bundesliga champions, however their hopes of landing their number one midfield target are diminishing day by day.
It was originally thought that Kroos, who is valued at around £25million, was willing to leave the Allianz Arena in order to secure a bigger contract, however he is now expected to sign a new contract with the European champions.
Kroos' decision to stay at Bayern Munich - if reports are proved correct - will come as a major blow to David Moyes' summer transfer plans.
The 24-year-old, whose current deal runs out at the end of next season, was said to be at the top of Moyes' summer transfer shortlist.
Pep Guardiola will be desperate to keep hold of the Bayern Munich man as he has played a major part in his side's recent success in both the Bundesliga and Champions League.