Wolfsburg coach Felix Magath has announced he expects to sell Diego.
Liverpool and Manchester City have been linked with the Brazil international since the end of last season.
The relationship between club and player has been strained in recent months and came to a head on the final day of last season when Diego stormed out of the team hotel after only being named on the bench for a key encounter with Hoffenheim.
Both Magath and Diego sought to patch up their differences in the wake of that incident, indicating a willingness to work through any problems, but the pair have now confirmed they will go their separate ways following fresh talks after reconvening for pre-season training.
"After this conversation it was clear that further co-operation would be difficult and that it is better to separate," said Magath.
