The former Barcelona man was training at Old Trafford in November although rumours of a deal with United have so far turned out to be wide of the mark.
Queretaro were linked last week with a move for Valdes and representatives of the club flew to Barcelona for talks with the Spain international.
However, sporting president, Joaquin Beltran says that talks have collapsed and there is no prospect of any transfer for Valdes.
“There was no agreement,” said Beltran. “There was a good situation but the matter of Valdes’s physical state following his operation was one of the points to be determined.”
Valdes hasn’t played since he damaged his cruciate knee ligaments while playing for Barcelona in a Spanish league match with Celta Vigo at the end of March. His contract at the Nou Camp expired in the summer and a move to Monaco fell through due to his injury. A move to Liverpool was also ruled out when the Merseyside club demanded evidence of his current physical state before making any formal offer.
It is believed that Valdes’ wage demands also went some way to scuppering the deal.
Queretaro recently signed a former Barcelona team-mate of Valdes, Brazilian legend Ronaldinho.