Heaton was all set to move to Kenilworth Road to become the Hatters first choice but according to The Telegraph, Ten Hag has informed him that he will not be granted a departure.
It comes after the club's decision to withdraw their contract offer to De Gea whose current deal expires on June 30.
Heaton was keen to make the move to the Premier League new-boys and take his chance at becoming a Premier League regular.
But the 37-year-old former United academy graduate looks set to stay at the club as Ten Hag's goalkeeping crisis bears no sign of easing.
United face the prospect of kicking off the new season with Heaton as the club's first-choice goalkeeper whilst Ten Hag's other back up Dean Henderson is recovering from surgery on a thigh injury sustained in January whilst on loan at Nottingham Forest.
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Heaton left the club in 2010 in search of game time and played in all four divisions. He also had a stint in Belgium with Royal Antwerp before later becoming first-choice at Burnley.
It remains to be seen how the story ends for long-term No.1 De Gea who signed for United from Atletico Madrid in 2011.
With time running out for the Spaniard it appears that Ten Hag is focusing his attention elsewhere.
The United boss is believed to be monitoring Inter goalkeeper Andre Onana, who played under the Dutchman during their time together at Ajax.
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The Cameroonian fits the profile Ten Hag is looking for in a goalkeeper with his distribution and ability to comfortably play out from the back, viewed in a positive light.