The two city rivals had been involved in a bitter tug-of-war over the Cagliari striker.

But European champions AC Milan said in a statement Saturday that they were withdrawing their offer.

"Milan had signed a contract with Cagliari in relation to the transfer of player David Suazo," the AC Milan statement said.

"However in light of the fact that the player had previously undertaken a contract with Inter, the club are withdrawing from the transaction."

The announcement leaves the way open for Inter to sign the 27-year-old, who joined the Sardinian side from Honduran club Olimpia in 1999.

Suazo, who was close to joining AC Milan a year ago, scored 14 goals in Serie A last season.

His best return was 22 goals in 37 matches in the 2005-06 season.