Liverpool have decided not to sign Nicolas Anelka on a permanent basis.
The striker had been on loan at Anfield since December.
But he will now return to Paris St Germain following Gerard Houllier's decision.
A Liverpool statement read: "After a lot of thought we've decided not to make Nicolas Anelka's move from Paris St Germain a permanent one.
"This was a difficult decision and we know that Nicolas will be very disappointed, but the manager has always had to do what he thinks is best for the club and the development of the team."