In a press release, Saint-Etienne blamed the “intervention of agents” for their pursuit of Niang ending in failure.
Niang’s move to the Stade Geoffroy-Guichard was so advanced he had already passed a medical.
But the Senegal international is now poised to stay with Rennes, where he faces a battle for game time.
Even so, head coach Julien Stephan says he will welcome 24-year-old Niang back with open arms.
“Guirassy’s arrival brings competition, but I believe to play at a high level, competition is necessary,” Stephan told RMC Sport.
“If M’Baye wishes to stay here and get back in the project, he is welcome. I welcome him with open arms.”
Signed for €15m from Torino last year after a successful loan spell, Niang scored 15 goals in the 2019-20 campaign.