Albion's £10 million deal to sign Ghana striker Raphael Dwamena from FC Zurich is off.
The 21-year-old has failed a medical, according to reports in Switzerland due to a heart condition.
A statement on the Seagulls' official website confirmed: "Brighton & Hove Albion have withdrawn from the potential transfer of Raphael Dwamena after the player failed the club's medical.
"Albion had previously agreed terms with both Dwamena and FC Zurich over a potential deal for the 21-year-old, which would have been subject to a UK work permit.
"The club would like to wish Raphael the very best for the future, as he returns to FC Zurich."
It is the second time this summer Albion have pulled out of a deal due to a player failing a medical.
They were set to sign Brazilian midfielder Renato Neto from Belgian club Gent until the medical revealed a knee condition.
FC Zurich said in a statement on their website: "We are very surprised at this decision. Naturally, we also had a medical examination carried out by the Schulthess Clinic before the move.
"The same deviation from normal was determined. However, this has been judged as being neither harmful to health nor compromising the performance of a top athlete.
"Whether a change in the medical situation has actually occurred in the last eight months is now being examined.
"Despite this unforeseen development, we are looking forward to the return of Raphael Dwamena and are convinced that he will again be fully committed to FC Zurich".
Albion are meticulous in their medical procedures. In the case of Neto, they sought a second opinion after discovering an historical knee problem.
They were vindicated as Neto has since undergone knee surgery.
Earlier this year, the club's routine screening process uncovered that central defender Connor Goldson had a heart condition.
Goldson had surgery on a swollen aorta and is now back playing.
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