Cellino declared himself 'ashamed' and said he was ready to 'jump from the window' after the Football League confirmed he had failed their owners' and directors' test in the wake of his tax offence conviction in Italy.
The announcement put the skids on his Eleonora Sport company completing the 75 per cent purchase it agreed at the start of February from current owners Gulf Finance House Capital.
GFH Capital remain interested in the project if Cellino is successful in an appeal, which must be launched in the next 14 days, but he appeared less than positive in an interview with the Guardian on Monday evening.
He said: "I'm not a dishonest man. If they say I did this, I am stupid. Why would I do something like this? Because I am a fool - I am stupid.
"There's different justice in Italy. I prefer the English way, but I am in Italy unfortunately. I pay millions and millions at clubs and they [the courts] say I tried to screw them over for a small amount. It's stupid. I could pay that tomorrow.
"I am not a dishonest crook. If I made a mistake, it was not on purpose. I'm shocked, I'm very shocked. I feel like I will disappear. I am so ashamed of myself, you have no idea. It's not about the money at the moment.
"I didn't try and do anything bad to Leeds, to anyone - I just wanted to do something good. I'm so shocked that I feel like I will jump from the window right now. I feel so ashamed.
"Why did they take two months to wait for the decision of the Italian court? I could have delayed the trial for one or two years if I had wanted."
A statement from the Football League read: "At its meeting yesterday evening (Sunday), the Board of The Football League considered the eligibility of Massimo Cellino under its Owners' and Directors' Test.
"The Board considered detailed legal advice with regard to the application of its regulations within the context of a decision made under Italian law.
"Mr Cellino was recently found guilty beyond reasonable doubt by a Court in Sardinia of an offence under Italian tax legislation relating to the non-payment of import duties on a boat. This resulted in a fine of €600,000, an order for the payment of trial costs and the confiscation of the boat in question.
"Having fully considered the matter, the Board agreed unanimously that the decision of the Italian Court does constitute a disqualifying condition under its Owners' and Directors' Test.
"The relevant disqualifying condition being that Massimo Cellino has been convicted of an offence involving acts that would reasonably be considered to be dishonest.
"In line with Football League regulations, Massimo Cellino is entitled to appeal against the Board's decision within 14 days. In such circumstances, The League would seek to expedite the process to deliver certainty to all parties in the shortest possible timeframe."
Leeds responded by saying they are "disappointed" by the decision.
"The club and its shareholders are disappointed at the decision of the Football League not to approve Massimo Cellino as a director of Leeds United FC.
"However, the Board and Executive Management of the club, will continue discussions with the Football League and Eleonora Sport to find a solution that is suitable to all parties.
"Our shareholders continue to support the club directly or through additional investments as has always been the case.
"We would like to reassure the fans of the continuity of our great club."