The club were hoping to agree a renewal with the 26-year-old.
However, the Daily Mail is reporting that Dier wants to double his £60,000-a-week wages.
His contract is up in less than a year and Jose Mourinho would like him to stay.
But chairman Daniel Levy is not happy at how much Dier wants to earn on his next deal.
It is an unrealistic demand according to the club, especially in the post-COVID-19 economy.
If Dier does not commit to a deal during the transfer window, he is likely to be sold.