The former Ghana international had looked set to sign for the Portuguese side this week after a dispute with Schalke.
Former Portsmouth and Tottenham midfielder Boateng was banned indefinitely by the German club in May after what Schalke manager Roberto di Matteo described as a “lack of mutual trust”.
A move to Sporting was the player’s way out, but the Portuguese side announced the deal was off on Wednesday evening.
They registered their “sadness” at failure to thrash out a deal, announcing on their Facebook page that “after negotiations, it was not possible to reach an agreement relating to his image rights”.
Boateng still has a year left on his current contract at Schalke but looks as if he has no way back.