Newcastle have signed midfielder Darren Ambrose from cash-strapped Ipswich for a fee of around £1m.
Ambrose has scored 11 goals from midfield this season
The England Under-21 international, who has scored 11 goals this season, was sold as the club bid to ease their financial situation.
Ambrose, 19, had been tipped to return to Portman Road for the rest of the season, despite agreeing terms with Newcastle.
But later on Tuesday, Ipswich announced on their website: "Darren will not be returning to Portman Road on loan.
"He was hoping to return to Town on loan for the rest of the season but that is now not possible."
Ambrose, 19, completed the formalities of his move on Monday and will link up with former Ipswich favourites Kieron Dyer and Titus Bramble.
After agreeing terms, he said: "I've got a lot to thank the people at Ipswich for, everyone has been great to me since I first arrived at 10 years old.
"The fans have been brilliant to me as well and I have a real soft spot for the club. Ipswich will always be important to me."
Former Ipswich manager George Burley believes Newcastle have secured the signing of another promising English player.
"This season I took him in pre-season with the first team, and he has never looked back," said Burley.
"He looks like he is going to be a tremendous acquisition for Newcastle.
"Sir Bobby Robson has made some great acquisitions, not only for now but for the future."
These sales were a necessity in our current situation and the matter was largely out of our hands
Ipswich chairman David Sheepshanks
He added: "One of his assets is he can score goals."
With Ipswich in administration, the Magpies have been able to secure his signature even though the transfer window closed in January.
The First Division club are also poised to sell defender Hermann Hreidarsson to Portsmouth as they seek to stay afloat.
Hreidarsson joined Town from Wimbledon for £4.5m in 2000 and has featured as both left-back and centre-back.
Last August, the Icelandic international turned down a move to West Bromwich Albion.
"These sales were a necessity in our current situation and the matter was largely out of our hands," Ipswich chairman David Sheepshanks told the club's website.
Captain Matt Holland told the BBC Sport website on Friday he may have to be sold as the club counts the cost of relegation from the Premiership last year.