Hull’s proposed sale to a consortium from China and Hong Kong is off, BBC Radio Humberside understands.
Hull were put up for sale in 2014 by owner Assem Allam after the Football Association turned down his request to change their name to Hull Tigers.
An agreement to sell to a group led by Dai Yongge and Dai Xiu Li was reported to have been struck a fortnight ago.
That deal has fallen through amid speculation they do not meet the FA’s fit and proper person test.
“As I understand it, the problem is not Hull City on the takeover being off,” said BBC Radio Humberside’s David Burns.
“It’s nothing Allam has done so I assume it’s the fit and proper person tests. The Premier League have told me they can’t comment on the situation.”
Hull’s return to the Premier League this season has been overshadowed by off-the-pitch issues.
The club have been without a manager since Steve Bruce resigned in July after a fall out with vice-chairman Ehab Allam.
Bruce had reservations about the direction of the club and the lack of transfer activity, and Hull did not make a summer signing until 30 August.
The club put takeover talks on hold until after the window closed to “ensure stability”.
Caretaker-boss Mike Phelan managed to bring in six players before the deadline, including midfielder Ryan Mason from Tottenham.
Hull fans protested against the “ill-considered ideas” of the promoted club’s owners during their first two home games of the Premier League season, against Leicester City and Manchester United.