The Senegalese is completely out-of-favour at the London Stadium, and Palace looked set to save the 28-year-old from his East London nightmare.
Sakho was set for a medical at Palace after a deal of around £10m was agreed, but the transfer fell through on Thursday afternoon.
The striker currently has a fairly respectable record of 24 goals in 71 games for the Hammers, who have struggled badly this season and are doing their best to remain in the top flight alongside the Eagles.
Palace are in need of a striker after failing to score a single goal in their first seven games, and have not been helped by club record striker Christian Benteke, who has just one goal from 16 games this season.
He is keen for regular first team football as Sakho is looking to be on the plane to Russia alongside his Senegal teammates. He scored twice in the qualifiers as his country qualified for their first World Cup since 2002.