The Nashville owner has reportedly sent a letter to the NHL advising it to no longer consider Balsillie as a prospective owner of the team.
A league source told CP that Leipold cited the absence of a finalized sale agreement and Balsillie's desire to relocate the franchise to Hamilton as reasons for his decision.
A message was left with Balsillie's lawyer Richard Rodier.
Leipold and Balsillie, the co-CEO of BlackBerry maker Research In Motion, agreed to a term sheet for the transfer of ownership of the club, but that is nonbinding. Delays in closing the deal prevented the sale from being up for vote by the league's 30 teams when they met earlier this week.
Balsillie has already started a process to move the Predators to Hamilton should a potential out in the team's lease with the arena in Nashville be exercised after the sale's completion. Leipold announced May 24 he was selling to the team to Balsillie.
The agreement between Leipold and Balsillie carried a June 30 deadline for completion, but that date could have been extended.