In a statement to the stock exchange, the broadcaster says negotiations with the former BskyB chief “had highlighted a number of substantial differences, including a failure to finally agree contractual arrangements”.
Reports earlier this week said Ball had rejected the estimated £20m package offered to him and was instead believed to be negotiating a £30m package over five years on top of a £1m a year salary.
The news will be a blow to the broadcaster, which will now have to start again in its search to replace Michael Grade.
HMV chief executive Simon Fox was reportedly the frontrunner for the post but is understood to have pulled out of contention last month.
ITV also announced Grade will also stand down as chairman of the company at the end of the year. It adds that the search for a new chairman is “well advanced and discussions are ongoing with a number of external candidates”.
According to the statement, Ball and ITV had also disagreed over the future of the chairmanship.