Ole Gunnar Solskjaer has been desperately chasing the 20-year-old end of England all season.
United was given the August 10 deadline to complete the deal.
However, with the deadline now over, Sancho joined his Dortmund teammates at a camp in Switzerland.
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And the club’s boss, Zorc, revealed that the deal with United was deactivated and that he planned to stay with Sancho at least until 2023.
Zorc revealed: “He will play for us the season.
“The resolution is final. I who answers all the questions.
“Last summer we adjusted the salary to the evolution of Jadon’s performance.
“In this context, we have extended the contract until 2023.”
The Bundesliga team had in the past told United that they were looking for an agreement to stand until 10 August.
But the Red Devils refused to comply with their 108 million pound (A$197 million) order.
Man Utd hoped to insure a deal value of between 60 and 70 million pounds ($10-128 million) in advance, and the rest would be paid later in installments and incentives.
Sancho’s fault can open the door for the Red Devils to continue chasing Aston Villa’s Jack Grealish.
United has taken an interest in Grealish’s services, but the general consensus is that signing Sancho is the priority.
With this agreement likely failing, United will have the cash and area on its team to dedicate to Grealish.
Villa needed to lose it and kept an offer of 80 million pounds (A$146 million).
On Monday, Dortmund coach Lucien Favre put his players to the test at a camp in the Swiss city of Bad Ragaz.
Sancho was named to the team, although it all ended the series of one-year movements.
Dortmund insisted that he would sell to Sancho once he began pre-season education.
Now that it’s underway, United will have to look the other way, with Kingsley Coman emerging as an option.
Sancho had provoked rumors that an agreement was imminent after his return to the UK.
The end of England was seen at a party hosted by rap stars Krept and Konan on Saturday.
Dortmund’s head of communications, Sascha Fligge, said there is no challenge with Sancho’s return to England.
Fligge said: “It’s not unusual and players move home before the education camp if they don’t pose a risk.”
“The same thing happens to Jadon [Sancho].
“From our point of view, the photographs they have shown us do not violate that way.”
This article was first published on The Sun and reproduced with permission.
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