Hull City Council has opted to retain ownership of the 25,000 seat KC Stadium, despite interest from Hull City owner Assem Allam.
Mr Allam met council officials hoping to agree a deal to buy the stadium and some of the surrounding land.
But he has released a statement claiming the council had made it clear the stadium was not for sale.
He said: "I am only sorry the community will be deprived of a first-class sporting facility for all the family."
A Hull City Council statement said: "We have had positive discussions with Mr Alllam about his support for sport, engaging with communities and raising aspirations in Hull which marry up with the council's investment in sport and participation.
"We have agreed to work with Mr Allam to develop better facilities on the KC site for Hull City AFC, including for training.
"However, we will not be selling the freehold as we want to ensure that public assets are maintained for all teams and clubs and for people who enjoy sport."
The 25,000-seat stadium was built by the council in 2002 at a cost of £43m, with the tenancy shared between Hull City and Super League club Hull FC.
Mr Allam still owns the lease on the stadium, which still has 41 years to run.
The Tigers' chief has made no secret of his desire to buy the stadium in order to develop its facilities.
In addition to top level football and rugby league, the 25,000 seat stadium has hosted rock concerts featuring Elton John, Bon Jovi and Neil Diamond.
The Allams have previously stated their plan is to develop the facility to provide a wide range of sporting activities for people of all ages.