The Reds were eager to finalise another temporary switch for the Serbian midfielder, and were in regular talks with the newly promoted Premier League outfit.
Grujic spent the second half of 2017/18 with the Bluebirds during their promotion charge, making 14 appearances for the club and earning Warnock’s admiration.
But while Cardiff pushed for another loan deal for the 22-year-old, Warnock has now ruled this out, telling reporters: “Grujic looks like he will stay put.”
“I think he would be better off here but it is a contract issue, I understand his point of view,” he explained.
“Liverpool have four competitions before Christmas and he can play in those without being named in the 25-man squad.
“I have missed out on a couple of targets waiting for him. It is disappointing as everything was agreed with Liverpool, but sometimes fate intervenes.”
This was likely in order to complete his season-long move to the Cardiff City Stadium, but with Liverpool also looking to tie him down to a new long-term contract problems clearly arose.
Where this leaves Grujic with just five days remaining before the English transfer window closes is unclear.
Lazio and AC Milan were both interested in a permanent deal for the former Red Star Belgrade youngster, while Atalanta made contact over a loan move.
If Grujic fails to agree an extension to his current contract Liverpool could look to secure a sale, with clubs outside of England still able to sign players until August 31.
But as Warnock suggests, he may remain on Merseyside for the campaign, with Klopp a firm admirer of the player he made his first-ever signing as Reds manager back in 2016.