Bayern Munich chairman Karl-Heinz Rummenigge has confirmed Thiago will not sign a new contract and is expected to leave the club.
The midfielder joined the German giants from Barcelona in 2013 and has one year left on his current deal.
Thiago, 29, has recently been linked with a move to Premier League champions Liverpool, and Bayern have accepted that his departure is imminent after sporting director Hasan Salihamidzic’s failed attempts to convince him to sign an extension.
“Actually, the conversations Hasan had with him were always very productive. And at some point it actually seemed that [a deal would be reached]. But then Thiago informed Hasan that he would like to do something new again, and so it is,”