It is understood the Senegalese did not fail his medical but he would not have been fit for the start of the season.
Sakho, 26, scored 15 league goals in 44 appearances for West Ham, although he has suffered several injury problems.
His likely arrival had added to speculation that the club would sell striker Saido Berahino, 23, who is a target for Crystal Palace and Stoke.
The Potters have offered £17m with £3m in add-ons for the England Under-21 international - a fee which is close to West Brom's valuation of the striker.
However, with the Sakho deal now off, Berahino will be remaining at the club.
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