Kimi Raikkonen will be absent from the Formula One grid next season, his manager Steve Robertson announced to the Finnish newspaper Turun Sanomat late on Tuesday.
The Finn, having agreed to make way for Fernando Alonso at Ferrari, had been in serious talks with McLaren, but the parties reportedly disagreed about his salary, sponsor duties and his freedom to race in rallies.
"The only option for F1 next season was McLaren or nothing," Robertson said. "Kimi and McLaren were unable to reach an agreement, so he will not drive at F1 level, at least not next year."
Raikkonen's severance deal with Ferrari means that he stands making more money by taking a year off in 2010 than he would if he had stayed in F1.
Turun Sanomat said the most likely option for a Raikkonen return in 2011 is with Red Bull Racing.
Next year, he is likely to be active in rally cars and possibly the Le Mans 24 Hours, the newspaper added.