The Olympic Park Legacy Company will confirm on Tuesday that talks have been called off with West Ham - their preffered bidder, following legal action brought by Tottenham and Leyton Orient.
Now the OPLC has confirmed that the stadium will instead remain in public hands, and they will now look to find a permanent tenant instead.
The OPLC will also now foot the bill to convert the stadium from an 80,000 seater to a 60,000 arena.
The announcement to keep the stadium within the control of the OPLC will also guarantee a running track will remain in place.
West Ham have now confirmed that if, as expected, the OPLC confirm the sale of the stadium is no longer an option, they would be happy to rent the venue.
In a statement released by West Ham in conjunction with Newham Council, who have backed the Hammers' proposed move, the club confirm that they are happy to lease the venue.
Karren Brady, vice-chairman of West Ham United, and Kim Bromley-Derry, chief executive of the London Borough of Newham said: "We understand Ministers will make a statement later and will not pre-empt that.
"Uncertainty caused by the anonymous complaint to the European Commission and ongoing legal challenges have put the Olympic legacy at risk and certainly a stadium, as we envisioned it, may not be in place by 2014 due as a direct result of the legal delay.
"Therefore we would welcome a move by OPLC and government to end that uncertainty and allow a football and athletics stadium to be in place by 2014 under a new process. If the speculation is true, West Ham will look to become a tenant of the stadium while Newham will aim to help deliver the legacy.
"Our bid is the only one that will secure the sporting and community legacy promise of the Olympic Stadium - an amazing year-round home for football, athletics and community events of which the nation could be proud.
"The true legacy of London 2012 will be the creation of jobs and a generation of young people inspired by sport based around a community home for all by 2014. We remain committed to help deliver that legacy promise to the people of London and the nation."
Source: Team Talk
Source: Team Talk