Silva, who is not part of Wolves' plans for the upcoming season, had reached an understanding with the club and his agent, Carlos Oliveira, for a transfer at the end of last season.
Dortmund showed serious intent, submitting three separate bids to secure his signature. However, negotiations stalled after Wolves sporting director Domenico Teti declined to meet with Dortmund officials, a move that frustrated the Bundesliga side.
Initial discussions between the parties revolved around a deal worth 20-25 million euros all-in. Wolves have since raised their demands to 25 million euros plus 5 million in bonuses.
The Midlands club are believed to be attempting to spark an auction for the 22-year-old, with RB Leipzig and Roma also linked, though neither side has reached an agreement.
With talks collapsing, Dortmund have now turned their attention to alternative striker options. Despite this setback, several clubs across Europe are understood to be keeping a close eye on Silva's availability.
The forward, who joined Wolves as a highly rated teenager, has struggled to secure a consistent starting role at Molineux and spent recent seasons on various loan spells.
His next destination remains unclear, but the coming weeks could prove decisive as the transfer window approaches its final stages.
Manchester City, Tottenham and Sunderland got their Premier League campaigns off to winning starts, while Brighton and Fulham could not be separated in opening-day action on Saturday.
Everton have announced the signing of goalkeeper Tom King from Wolverhampton Wanderers on a two-year contract, keeping him at Goodison Park until June 2027.
Borussia Dortmund and their striker Sebastien Haller are locked in negotiations to end his contract early, with a potential move back to FC Utrecht on the horizon.
Wolves begin the 2025/2026 Premier League season under Vítor Pereira, who now starts his first full campaign after taking over mid-season and guiding the club to safety.
