David Turnbull's transfer to Celtic from Motherwell has fallen through with the player now set to remain at Fir Park.
Celtic held positive talks with Turnbull's representatives and reached an agreement with Motherwell on June 12, with the Scottish Football Writers' Young Player of the Year also agreeing personal terms ahead of a medical.
However, during his medical, an issue was identified that requires the player to have immediate knee surgery and subsequent rehabilitation, keeping him out for an "extended period".
Motherwell say Celtic were still keen to sign the 19-year-old, but claim terms could not be agreed after the Scottish champions submitted a revised offer following his medical.
"Celtic were still keen to sign the player despite this matter arising. But having presented revised transfer terms to Motherwell, the clubs could not reach an agreement," Motherwell said in a club statement.
"David will now remain at Fir Park and will shortly have an operation which will rule him out of any football for an extended period, the exact length to be determined following surgery.
"We will give David all the support he needs during this process. We wish him the best with his procedure and rehabilitation, and look forward to watching him play in claret and amber again in the near future."
Celtic also released a statement regarding their failed pursuit of Turnbull.
"It is unfortunate that we were not able to proceed with the transfer of David to Celtic, having agreed a significant fee with Motherwell and reaching an agreement with the player," it read.
"It is regrettable that David will be out of action for a considerable length of time and, clearly, these circumstances are totally outwith the club's control. We did everything we could to find a solution.
"We would like to thank David and his representatives for the professionalism they have shown throughout. We also thank Motherwell FC for the way they have handled this process.
"We wish David all the very best with the operation and every success for the future."
Turnbull rejected a move to Celtic in early June amid interest from English clubs, including Premier League newcomers Norwich, who matched the Hoops' £3.25m bid.
He scored 16 goals in 34 appearances in his breakthrough season for Motherwell last season.
Lennon: Celtic went above and beyond
Neil Lennon has defended Celtic following the collapsed move for Turnbull, insisting they are "very disappointed" and tried everything in their power to make a deal possible with the player.
Asked whether the club were protecting themselves in offering revised terms, Lennon told Sky Sports News: "Yes, but we still had the player's best interests at heart.
"The club did everything they could for the player and to make the deal happen. I've no issues with the way the club has conducted themselves at all. If anything they went above and beyond."