Modern TV presenter Medhat Shalabi said that Fathi has penned a three-year deal with Al-Sadd, but the Egypt international firmly refuted the report.
"I don't know from where these rumors arose, I haven't received any offer from Al-Sadd. I'm still a Blade," Fathi told FilGoal.com on Friday.
"However, if Al-Sadd are really interested I may consider moving to them and have a new adventure in Gulf countries."
The 23-year-old doesn't feature in coach Bryan Robson plans for the new season as he hasn't been included in Sheffield squad since the beginning of the Championship.
"I want to depart Sheffield. I'm currently searching for a new club and may join a new English team within the coming few days on a loan deal."
Fathi has once again denied that he is interested in a move to Zamalek, who have been persistently chasing the talented midfielder.
"I totally rejected their offer. This matter has been closed," he concluded.