Newcastle were given permission to speak to Sebastian Larsson, and he was expected at St James' Park on Tuesday.
But he played in Brum's League Cup final defeat at West Ham, and Birmingham boss Alex McLeish says the 25-year old is expected to stay at St Andrews.
Alex McLeish: "I know Seb would like to stay so we'll just have to see.
"There is a contract on the table for him. It's up to him."
The Sweden international has scored 23 goals in 154 appearances for Birmingham.