Balotelli is available on a free transfer after leaving French giants Olympique Marseille at the end of last season, where he spent just six months but impressed with eight goals from 15 appearances.
Balotelli and Flamengo have been in discussions for some time regarding a transfer but it is believed that the 29-year-old’s wage demands have served as a stumbling block to getting a deal over the line.
Flamengo's statement read: "Flamengo, athlete Mario Balotelli and their representatives decide, by mutual agreement and after two days of cordial meetings in Monaco, to close on this date negotiations involving the possible hiring of the athlete."
Balotelli is considered by many as an unfulfilled potential with his behaviour on and off the field often called into question.
He burst onto the scene with Inter Milan, winning the treble at the Italian club under Jose Mourinho in 2010 before switching to Manchester City in England where he helped the Citizens to win the Premier League trophy under the tutelage of Roberto Mancini in 2012.
Since then Balotelli has taken in spells at AC Milan, Liverpool and OGC Nice before ending up at Marseille in the second half of the 2018/2019 season.
Despite his checkered past, Balotelli is not short of suitors, with newly-promoted Italian Serie A side Brescia reportedly eyeing a move for the 36-time capped Italian international.
