The midfielder spent the 2025-26 season on loan at Tottenham Hotspur from Bayern Munich, with the agreement believed to have included an option for a permanent deal worth around £22million.
Tottenham manager Roberto De Zerbi had been keen to trigger that option, namechecking Palhinha as one of the key players behind Spurs avoiding relegation from the Premier League during a difficult campaign at the Tottenham Hotspur Stadium.
Palhinha scored the only goal in a 1-0 win over Everton during a campaign in which his contribution proved central to Tottenham's survival.
However, taking to social media, the midfielder confirmed that his time at the Tottenham Hotspur Stadium has come to an end.
"Dear COYS, I am writing this message with heartfelt gratitude for all the kindness and support you have always shown me throughout my time at this special club," he wrote on Instagram.
"Representing Tottenham has had a profound impact on my life, not only professionally but also personally, and it is something I will carry with me forever.
"I always tried to repay, in the best way I could, all the affection, respect and trust you showed me, both on and off the pitch.
"As I have said before, what truly defines a great institution and a great football club is its supporters. Players, managers and directors come and go, but the fans remain.
"You are the ones who keep the flame of this club burning, season after season.
"I could not leave without expressing my special thanks to my teammates, the club's directors, the fitness coaches, the entire medical staff, and especially my dear Alessandra Massimi.
"London gave me more than a professional career, it gave me two homes that I will always carry in my heart.
"With the utmost respect and gratitude, I say goodbye to all of you. Thank you so much COYS."
Palhinha's exit leaves Tottenham needing a solution in central midfield, an area De Zerbi had previously identified as strengthened by the midfielder's presence over the course of the season.
His parent club, Bayern Munich, will now determine his next destination once the loan spell in north London officially concludes this summer.