SYDNEY FC have missed out in the race to sign Spanish great Fernando Torres.

It’s understood the club spent most of last night negotiating terms with the Spanish striker, who confirmed on Tuesday that he will sign for J-League club Sagan Tosu.

The departures of Bobo and Adrian Mierzejewski freed up $2 million to lure Torres, and it’s understood the FFA were also willing to chip in by dipping into the new marquee fund to put together an attractive package.

However a financial deal ultimately couldn’t be reached with Torres.

Hola a tod@s, mañana martes 10 a las 9.30 am tendré el placer de presentar ante los medios de comunicación mi nuevo libro digital audiovisual, al tiempo que contaré cual será mi nuevo destino futbolístico. Será en @9Fitness , en el número 3 del Paseo de Acacias en Madrid pic.twitter.com/8zYMNNeEfK — Fernando Torres (@Torres) July 9, 2018

Atletico Madrid's Spanish forward Fernando Torres celebrates after scoring a goal Source: AFP

Torres tweeted that he will be announcing his new ‘football destination’ at a press conference in Spain. The former Liverpool and Chelsea striker is a free agent after his contract with Atletico Madrid expired.

It was later revealed that he would follow fellow Spanisih international Andres Iniesta and ply his trade in Japan.

Torres would have been be the highest-profile A-League signing since Alessandro Del Piero signed for the Sky Blues in 2012.

The 34-year-old has won the World Cup and Champions League during his career and is said to have been looking to move to a club with an attractive lifestyle for him and his family.