Adebayor, 31, is out of favour at Tottenham and has been in talks with Villa for over a week now, with Sherwood keen to reunite with the Togolese forward after seeing Christian Benteke join Liverpool.
Sherwood had worked with Adebayor during his time at Tottenham, and their fruitful relationship had sparked the talks over a move to Villa Park - but with Adebayor stalling over a move, Sherwood has now pulled the plug on the transfer, according to the Daily Mail.
The report also states that, despite reports from the Daily Express that Villa are deep in talks with former Spurs and Manchester United hero Dimitar Berbatov, Sherwood won't turn his attention to the Bulgarian veteran.
The 34-year-old, who hit 75 Premier League goals during his time with Tottenham and United, is a free agent having left Monaco at the end of last season, but doesn't look to be closing in on a return to English football, with Sherwood looking elsewhere for another striker - even after signing Jordan Ayew and Rudy Gestede last week.
Villa's move to avoid signing ageing strikers with questions over their attitudes is a great decision from Sherwood, who still has money left to spend after Benteke's departure.
Ayew and Gestede have little to no Premier League experience, and bringing in a proven top flight forward such as Charlie Austin of QPR would be a much better deal for Villa than signing Adebayor or Berbatov, who are past their best at this stage of their careers.
Sherwood is bound to be in the market for another striker in the coming days, whilst Adebayor is left in limbo, with no future at Tottenham and seemingly no other offers on the table after Villa reportedly pulled out of a deal.