The London Evening Standard says the protracted £4.8m transfer of Sigthorsson is off according to his brother and agent Andri.
A disagreement over personal terms with the Iceland international appears to have been behind the breakdown, although Andri claims the two parties broke off talks weeks ago.
He said: "The discussions in the media about Kolbeinn's future are completely wrong. I don't think he'll play for Queens Park Rangers.
"We have not spoken for six to seven weeks and there is absolutely no connection between QPR and us.
"I'm sure Redknapp will attract a good striker, but I do not think it will be my brother."
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