Chelsea are now the only club in the running to sign Germany captain Michael Ballack, BBC Sport understands.
Inter Milan announced they were no longer interested in signing the 29-year-old on Friday.
Yet Inter realised they were unlikely to be able to sign the midfielder as long as Chelsea were interested in him.
Ballack sees his future away from Bayern Munich and is not talking to the German champions about renewing his contract with them.
Inter Milan owner Massimo Moratti announced he had pulled out of the race to sign Ballack on Friday.
"I have read things in recent days that are not true," Moratti said.
"From what I understand, it appears Ballack's requirements are exorbitant and, therefore, we are not interested. This is the end of the Ballack affair."
Real Madrid had confirmed their interest in Ballack earlier in the season, but changes at the club meant this was not followed up.
Real sacked coach Wanderley Luxemburgo in December last year and their president, Florentino Perez, stepped down earlier this week.
Bayern chairman Karl-Heinz Rummenigge has admitted that Ballack is set to move to Chelsea when his contract expires in the summer.
"Inter made their move for Ballack much too late. I'm sure that by now he is joining Chelsea," Rummenigge said.
"There are little possibilities he'll stay. The reasons are not of an economic nature but in his desire to have new experiences."
But, in any case, Inter were unlikely to sign the German while Chelsea were in the running for him.
Ballack has denied reports that he has already signed a four-year deal with the Blues, but has made it clear he wants a new challenge.
His agent Michael Becker last week told BBC Sport that Ballack would want to join a club with a better chance of winning the Champions League than Bayern.
And Bayern manager Felix Magath has said the club is already seeking a replacement for the midfielder.
He said: "We need to look for a leading figure outside the club. When Michael leaves we will lose a personality who takes responsibility."
"We do depend a lot on him but that does not mean we will have problems once he's gone.
"This is a great opportunity to take a new orientation."
Ballack, who joined Bayern from Bayer Leverkusen in 2002, is generally regarded as Germany's only genuine world-class player.