The 29-year-old former Manchester City forward was close to agreeing a return to his boyhood club after falling out of favour at San Siro, but the Vila Belmiro outfit have been unable to meet Milan's asking price ahead of the closure of the Brazilian transfer on July 15.
A statement published on Santos' official website read: "Santos has not reached an agreement to sign Robinho in this transfer window.
"The club, the player and Milan tried to agree on the conditions that would make the transfer possible but, despite effort from all sides, it was not possible to meet the numbers.
"The sum of the transaction, including the payment to the Italian club and the athlete's salary remains far from the reality of Brazilian football."
Robinho, who spent six months back at Santos on loan from City in 2010, only managed two league goals for the Rossoneri in the 2012-13 season.