Ferrari's interest in signing Adrian Newey had cooled as the Scuderia did not wish to become involved in a bidding war with Aston Martin, Autosport understands.
Newey is set to be announced at Aston Martin after speculation over his future, as he prepares to leave Red Bull after 18 years at the Milton Keynes squad.
With Newey's value high given his success at Red Bull, particularly with the current generation of cars, he and manager Eddie Jordan - who was helping to coordinate the deal - were looking for an agreement that they felt was worthy of Newey's stature.
The revered designer was heavily linked with a move to Ferrari when the news of his Red Bull departure became public, and it is understood that Ferrari was willing to sanction this.
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Sources suggest that team principal Frederic Vasseur had secured the budget to sign Newey, who would have joined the team as a consultant and operated from the UK rather than having to uproot to Italy.
This would not be dissimilar to how John Barnard worked as Ferrari's chief designer; Barnard set up an office in Guildford rather than move to Maranello, with engineers seconded to his personal department.
However, Aston Martin made Newey a substantial offer to join the team, as it accelerates its plans to enhance its team amid a disappointing 2024.
In recent months it has been announced that ex-Mercedes engine head Andy Cowell will join as CEO as Martin Whitmarsh leaves the team, and the team has also secured Enrico Cardile - formerly the lead of Ferrari's chassis design department.
Newey was courted personally by Aston Martin chairman Lawrence Stroll, and a secret factory tour of the team's new Silverstone headquarters had shown the British engineer the team's ambition.
"Adrian and I have been not only talking for months, but actually for years," Stroll told Bloomberg. "Adrian is clearly the most talented and gifted figure in Formula 1, based on his track record and history, in addition to being a hell of a gentleman.
"So I’d be very excited for Adrian to join our team, as I think every other Formula 1 team on the grid would feel exactly the same."
Ferrari is understood to have chosen not to match Aston Martin's offer (believed to be valued at $100m over three seasons, plus bonuses based on results) as it did not wish to be drawn into an auction over his services, and has instead elected to focus on enhancing its own structure in-house.
Instead, Vasseur is set to underline a new Ferrari technical structure that includes the in-bound Loic Serra, who joins from Mercedes as an expected replacement for Cardile.
