The Swedish international is in the final year of his current deal and negotiations over a new deal started more than a year ago.
But all attempts to persuade former Arsenal player Larsson to commit his future to Blues have so far drawn a blank.
McLeish told Press Association Sport: "There is nothing doing at the moment with Seb's contract.
"We were hopeful we could get something done but it is up to Seb. He is now in a good position for himself if he wants to become a Bosman.
"But we will keep trying to entice him."