Kaká saga is over!

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Brazilian star Kaká has decided to stay with AC Milan, ending talks of a record-breaking transfer to Manchester City.

The dramatic development came at the end of a day when it seemed Kaká was close to joining the Premier League outfit.

Talks have been taking place all day between City delegation, Milan vice-president Adriano Galliani and and Kaká's father, Bosco Leite.

It had appeared that a resolution had been found as reports stated that Milan had accepted City's £108 million bid, but Milan patron Silvio Berlusconi, in a sensational twist, has made an amazing announcement.

Berlusconi said live on TV: "Kaká is staying with Milan.

"When I heard him say that he prefers to stay, that he doesn't feel like he has lost the opportunity to earn a higher salary and that he feels privileged to wear the shirt, he values the closeness and the friendships, the heat and affection that all the fans have shown him even in these last two days, I said 'hallelujah' and we hugged.

"He has taken himself off the market with this decision to remain tied to the contract he has with Milan.

"A contract signed on a piece of paper but from now on we can pretty much call it signed with sentiment, signed with the heart.

"Kaká is a great champion and a great man. He turned down the offers from Manchester and preferred Milan, his teammates and his fans.

"He said no because money isn't everything in life. Money is important but there are also other things that are more important.

"As a fan I'm very happy. Kaká turned down a ton of money and it's a decision worth admiring."

Shortly after Berlusconi's comments, City responded by claiming that they called off the deal.

A club statement said: "Manchester City has terminated its discussions with AC Milan over the possible transfer of the player Kaká.

"Following a meeting in Milan today, the club felt that it was unlikely that the two parties could reach common ground for an agreement.

"The discussions reached only a preliminary stage and the player was not involved at any time. No commercial terms were framed."

City executive chairman Garry Cook added: "Whilst Manchester City Football Club has an obvious interest in world class players of the quality of Kaká, we owe it to our fans that such a transfer must work on every level; commercially, financially, in terms of results on the field and within Manchester City's broader community."

Upon hearing the news, fans holding vigil outside Kaká's downtown home celebrated as if the Brazilian had scored a goal.

They began chanting and Kaká replied by approaching a window with a Milan jersey in hand and beat his hand three times on his heart, sending the fans into delirium.

"All the messages coming my way said to choose with my heart and at the end that's what the choice was. It was absolutely not economical," Kaká told Milan Channel late Monday after the announcement

"There has been a lot of news, rumors and speculation over these last few days that put my father in a bad light. It's not like that.

"I never argued with my father. My decisions are always made with my family. My wife was great, she helped me and always supported me in all my decisions.

"At the end what counted was my history, where my ties are and where my heart really lies.

"I will be celebrating at home with a couple of friends now that this is all over, and I’m just looking ahead to moving forward with Milan."

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