Milan offered €30m to take Sergej Milinkovic-Savic on loan with €90m option to buy in August, but Lazio turned it down, claims the Corriere della Sera.
There had been strong rumours about the proposal for months and the newspaper insists it happened on the night between August 16 and 17.
It was on the verge of the transfer window closing and new Milan owners Elliott Management wanted to make a splash on the market after signing Gonzalo Higuain in a similar formula from Juventus.
The offer on the table was €30m for a one-season loan, plus €90m option to make the move permanent at the end of the season.
However, Lazio President Claudio Lotito had already pledged to Coach Simone Inzaghi that the Serbia international would not be sold.
Juventus had also been interested in SMS, but now that director Beppe Marotta has moved to Inter, it’s possible the Nerazzurri will be in the running too.
Manchester United remain strong contenders in the Premier League and could meet the €120m asking price.