Sao Paulo have conceded that Arsenal midfielder Denilson is unlikely to remain at the club beyond the expiry of his loan deal on June 30.
Denilson, 24, left Arsenal on a one-year loan last summer and, with Sao Paulo yet to meet the Gunners' valuation of the midfielder, he is set to return to Emirates Stadium this summer.
"Denilson won't stay. Arsenal want €6million (£4.9million) for him, but we won't pay that so we expect him to leave soon," Sao Paulo president Juvenal Juvencio told UOL.
The Brazilian had expressed a desire to remain at Sao Paulo, but Arsenal are unwilling to negotiate a further loan agreement. However, Juvencio has not yet given up hope of retaining Denilson, who emerged through the club's academy, for another year.
"Of course we will try to get the loan deal extended for another year, but it won't be easy," he added.