The French Club that Beckham has been in negotiations with for weeks announced that Beckham does not want to move his family from the Southland.
The 36-year-old will now try to finalize a 1-year deal with the Galaxy, which was paying him $6.5 million a season. The French Club PSG offered Beckham nearly double that amount.
"David Beckham is not coming," PSG President Nasser al-Khelaifi said at the Qatar Open tennis tournament. "We feel a little disappointed. But both sides agreed it would be better that we not do the deal ... maybe in the future."
Beckham's five-year contract with the Galaxy ended after he won his first MLS Cup in November.
Beckham and wife Victoria, a former member of the "Spice Girls," moved to California in 2007 after he left Real Madrid.
The celebrity couple now have four children and decided during a Christmas break in England that they did not want to move back to Europe permanently.
"I'm very proud of the time that I've spent with the Galaxy and it might continue," Beckham stressed recently.
The Associated Press contributed to this report.