Despite the apparent belief of Portsmouth manager Harry Redknapp that Benjani was leaving Fratton Park following England forward Jermain Defoe's arrival from Tottenham, City report that time simply ran out.
Club spokesman Paul Tyrrell told his club's official website: "Due to the late arrival of the player in Manchester, we were unable to complete the transfer."
The late twist will come as a shock to Pompey boss Redknapp, who only minutes earlier had appeared convinced Benjani was on his way.
He told Sky Sports News: "I'm sorry to be losing 'Benji' - because he's been a terrific player for us."
Instead, Redknapp is likely to have an embarrassment of riches in his forward line when he picks his team to face Chelsea in the Premier League on Saturday.