The talented 18-year-old was all set to join on a £500,000 deal in January, joining the club on loan until the deal could be made official.
And there was no wonder why Wolves were keen on the player.
Toney is Northampton's youngest ever goalscorer, he scored against Wolves in August and has five goals in his last 13 games for the League Two outfit.
The forward, whose overhead kick last season became an internet hit, had been tracked by several clubs but yesterday he reportedly underwent a medical at Compton ahead of the deal being concluded today.
But today has seen Wolves boss Kenny Jackett confirm that the deal is now off.
He told the media in his press conference that the deal had collapsed, but would not be drawn on the reasons why the deal, which was seemingly in the interests of all parties, has abruptly come to a halt:
“It looks highly unlikely that we will add to the squad today. We had some interest in Toney but that has gone now and we move on.”
Wolves therefore look set to keep hold of Leon Clarke, as no replacement has been found for the out of favour striker's services.