The Bantams agreed to extend their exclusivity agreement with Paladini earlier this month after the Italian made a formal offer on behalf of a consortium he is fronting. Initial talks had started in February.
But that deadline passed at midnight on Friday without a deal being struck and Press Association Sport understands that Bradford could now enter talks with other interested parties.
“As of Friday 29th May, the exclusivity period agreement with Mr Gianni Paladini has ended without a deal being completed,” said a brief club statement.
“The joint chairmen, Julian Rhodes and Mark Lawn, will continue to run the club as they have being doing, planning to take Bradford City forward into the new season at an exciting time for the club and its supporters.”
Paladini, who in March last year failed in his bid to take control of Birmingham, has not yet officially pulled out of negotiations with Bradford.
Bradford’s joint chairmen Rhodes and Lawn, plus Professor David Rhodes each hold a 33.3 per cent stake in the club.
The Bantams, who finished four points adrift of the play-offs in Sky Bet League One this season, turned down an approach this week from Sheffield United to speak to manager Phil Parkinson.
Parkinson, 47, has a year left to run on a three-year deal he signed at the end of the 2012/13 season after leading the club to the League Cup final and promotion from League Two.