The deal for the 26-year-old has proved too expensive for the West Midlands club and is considered over, BBC Sport understands.
Ramsdale is seeking first-team football after losing his place to David Raya and might still leave Emirates Stadium before Friday’s transfer deadline, but it is unlikely a move to Molineux will be resurrected.
Last week Wolves made a loan offer with an option to buy for about £20m, and remained in talks with Arsenal over the weekend.
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