The BBC was adamant that the supermarket not be promoted in any way through the 'Naked Chef' programmes.
In January, Jamie Oliver signed a £2m deal to be the face of Sainsbury's for a further four years. Sainsbury's said its sales increased by 6.8% over Christmas. Oliver's existing two-year deal with the supermarket chain runs out in the summer.
On Friday, Sainsbury's was forced to apologise for the latest Oliver advertisement, following accusations of racism. The spot promoting its oriental food range featured the cockney chef speaking Chinese like characters in badly dubbed movies.
With Oliver's career with the BBC, which discovered the now multimillionaire chef working at the River Café, now over, there is likely to be a fight among rival commercial stations to sign the chef up.
In a statement, the BBC said: "The BBC has today withdrawn from negotiations for a new series with Jamie Oliver after being unable to agree terms. Having discovered Jamie and developed his career, we wish him the very best with his future ventures."
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