The German giants were planning an increased offer for Trippier having had a £12.8m bid rejected but the move now looks unlikely given the gap in valuation between the two clubs.
Trippier was open to the move to Bavaria but Newcastle manager Eddie Howe has implored the board not to sell the England international this transfer window.
Bayern had initially enquired over a loan deal for the 33-year-old, which Newcastle refused to entertain before submitting their first bid which was subsequently rejected.
The Bundesliga champions looked set to launch another bid, however, the decision has been taken for them to walk away from the deal this month.
"Kieran Trippier deal is off," Bayern sporting director Christoph Freund has been quoted saying by Fabrizio Romano on Wednesday evening.
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"We only do what we are 100 per cent convinced of."
Bayern boss Thomas Tuchel has made bringing in a right-back his top priority having already brought in centre-back cover in the form of Eric Dier on loan.
It is believed that Trippier had agreed a verbal agreement with the Allianz Arena outfit which would see him reunite with England and ex-Tottenham teammate Harry Kane.
But Trippier, who left Spurs for Atletico Madrid in 2019, is forced to wait for a potential second stint abroad.
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One defender who could be set for the St James' Park exit door is club captain Jamaal Lascelles, who is wanted by Turkish club Besiktas.
Lascelles can sign a pre-contract agreement with overseas clubs as he is a free agent in January but Besiktas would like to recruit the centre back in this transfer window, talkSPORT understands.