The newly-promoted Bundesliga club had offered Leite a salary of €1.5m a year plus a signing-on fee of €250,000, a package Sport Bild reports represents the internal wage ceiling Schalke's hierarchy have set themselves this summer, meaning they would have gone as far as their finances allowed to land the 27-year-old.
Leite, who left Union Berlin on a free transfer at the end of his contract after four seasons in the German capital, is instead expected to continue his career in Spain, with Real Sociedad having long been considered the frontrunners for his signature after identifying him as a replacement for Duje Ćaleta-Car.
Everton, Eintracht Frankfurt and Besiktas were among the other clubs credited with interest during a saga that stretched across much of the summer.
The left-footed defender made his name at Porto before a loan spell at Braga and a permanent switch to Union Berlin in 2023 for a reported €7.5m, going on to make well over 100 appearances in the Bundesliga and establishing himself as one of the division's more progressive ball-playing centre-backs, ranking among the top performers in Europe's major leagues for progressive actions last season according to advanced metrics.
His departure from Union Berlin was confirmed some weeks ago, alongside fellow defender Danilho Doekhi, and interest in his signature has been widespread ever since, stretching as far as Saudi Arabia, where a PIF-backed club also made contact before he settled on continuing his career in Europe.
Schalke, promoted back to the top flight last season, have moved on to other options after missing out, having already brought in Maximilian Wöber, 28, as an alternative to strengthen their defensive options ahead of the new campaign.
The club's willingness to stretch to their self-imposed salary ceiling for Leite underlines how highly they rated the free agent, even if it ultimately was not enough to convince him to move to the Ruhr.