The governing body announced the 10 unions – from the Rugby Championship and Six Nations – failed to unanimously agree to enter into exclusive negotiations before the deadline.
The Nations Championship was set to start in 2022 with a two-division format, with the Six Nations and Rugby Championship – with two added teams – making up conferences before semi-finals and a final.
However, there was a "lack of consensus on key issues, particularly the timing and format of promotion and relegation".
"World Rugby undertook this important project with the best interests of the global game at heart in line with our vision to grow the sport as a game for all," World Rugby chairman Bill Beaumont said in a statement.
"While we are naturally disappointed that a unanimous position on the Nations Championship could not be achieved among our unions, we remain fully committed to exploring alternative ways to enhance the meaning, value and opportunity of international rugby for the betterment of all unions.
"This includes our continued commitment to competition and investment opportunities for emerging nations to increase the competitiveness of the international game with a view to possible Rugby World Cup expansion in 2027.
"I would like to thank all stakeholders for their detailed consideration and engagement, World Rugby’s executive team for their hard work and Infront Sports and Media for their full and ongoing support of our vision to grow rugby's global footprint."
The Nations Championship had been underpinned by a 12-year, £6.1billion guarantee from Infront Sports and Media.