Maloney was thought to be on the brink of joining the Foxes but Wigan Today has broken the story that the Scot's deal has fallen through.
Maloney had been expected to make the switch from the Championship strugglers to the Foxes in order to help Leicester City stay in the Premier League. The move was expected to cost around £1 million but the Scot could not agree personal terms for a move to the King Power Stadium to be completed.
Wigan boss Malky Mackay has said there is still interest from the player, including from across the Atlantic in America.
Mackay said: "Interest was from Leicester and there’s still interest from Chicago Fire. Shaun’s our player unless a new offer comes in."
Maloney has played a big role at Wigan Athletic in recent years as he became an integral part of the side that avoided relegation on a couple of occasions under Roberto Martinez, as well as their FA Cup triumph in 2013.
The 31-year-old is now back in training for the Latics ahead of their huge game with Blackburn Rovers as they look to fight off the threat of relegation.
So far Maloney has made 90 appearance for the club, scoring 15 goals since he arrived at the DW Stadium in 2011 from Celtic.