The Welshman was set to leave the Bernabeu for Chinese Super League side Jiangsu Suning.
But now according to BBC Sport’s David Ornstein, the deal has collapsed.
Bale was set to net a staggering £1million-per-week in the Far East which would make him the highest-paid player in football history.
Zinedine Zidane has continuously pushed him towards the exit door however barring a dramatic change of events, he will be part of the Frenchman’s squad next season.
The boss said after the club lost 3-1 to Bayern Munich in Houston that they were working on the player’s exit.
“We hope he leaves soon. It would be best for everyone. We are working on his transfer to a new team,” Zidane explained.
“I have nothing personal against him, but there comes a time where things are done because they must be done.”
Bale came off the bench to score in Real Madrid’s 7-3 defeat by rivals Atletico in New Jersey.
Many have been left outraged by Zidane’s treatment of Bale, given the part he has played in a number of the club’s recent honours, particularly in the Champions League.
Bale’s agent Jonathan Barnett revealed his outrage to AFP at the comments in Texas.
“Zidane is a disgrace – he shows no respect for a player that has done so much for Real Madrid,” he said.
Barnett also ruled out a loan move for his client.
Former Tottenham team-mate Mousa Dembele was backing Bale to be a success in China.
“Gareth will do very well here and it’s a league where he’ll fit in,” the Belgian told BBC Sport.
“He is an unbelievable player. In China they want people who create something from nothing. If you’re a stable player who just passes sideways they don’t really make the difference because they can only have three [overseas] players on the pitch.
“Gareth can beat three players and shoot, so for him it will be easy.”