City boss Kevin Keegan believed that he had sealed the signature of the England forward after agreeing a £7million fee with Leeds after he passed a stringent medical.
But Fowler simply changed his mind, as he told Sky Sports News: "I had the opportunity to think things over and I wanted to stay at Leeds United.
"I am happy to do so now and I want to do my best for the club."
Keegan could now turn his attention to former Nottingham Forest striker Pierre van Hooijdonk who's contract at current club Feyenoord runs out at the end of the season.