"We decided to back out of the deal because his financial demands are too high," Zamalek's interim chairman Galal Ibrahim told FilGoal.com.
Saleh penned a two-and-a-half year deal at the Cairo club on Saturday after ending an unhappy spell with Sudanese giants Merreikh.
Zamalek's out-of-favor goalie Essam Al-Hadari moved the opposite direction but the Cairo club insisted it was not a swap deal.
Saleh played for Zamalek's arch-rivals Ahli between 2008 and 2010 but barely made an impact, failing to fill the void left by the abrupt departure of Al-Hadari to Swiss side Sion.
Zamalek sought to land a new custodian after Mohamed Abdul-Monsef, who used to play second-fiddle to Abdul-Wahed Al-Sayed, joined Gouna in the close season.
Now the Whites will be looking for another keeper to act as understudy to their regular shot-stopper Al-Sayed.