The Wood Family Trust had asked Aberdeen City Centre for a quick decision on the proposal as it would be unable to keep the funds available beyond the New Year.
However, as the council were currently crafting a 'masterplan' to regenerate the town centre, it was unable to do so within the proposed timeframe.
A spokesperson from the council insists they have not rejected the offer outright, and they hope that the Wood Family Trust will continue to engage in the regeneration plans next year.
A report at the full council meeting read: "It is not currently possible for the council to provide the trust with the clear indication it seeks in relation to the design criteria stipulated as part of its proposed funding offer towards the cost of a city centre project.
"Given the generosity of the offer made and the ongoing commitment to seeing a transformational development of the city centre, it is hoped that the Wood Family Trust will actively engage with the masterplanning process as it unfolds."
Major plans worth £140m to redevelop the city's Union Terrace Gardens were rejected by the council last year.