The Potter's made the announcement on their website on Wednesday after an appeals panel rejected the case presented by club CEO Tony Scholes and manager Mark Hughes. Stoke have no grounds to appeal the decision.
Agudelo had signed a pre-contract with the Potters earlier this year and was expected to leave MLS in the January transfer window after Stoke and the league failed to come to an agreement on a fee to move the young striker to England sooner. It's unclear if Agudelo's deal with Stoke City remains valid or if he's now a free agent.
Scholes told the Stoke City website:
"We're bitterly disappointed that the panel rejected our appeal for a work permit for Juan. The criteria by which the panel should make work permit application decisions are well established and have been in place for some years and, despite recent comments to the media and discussion in the media, that criteria has not changed. We are therefore left amazed that our application for a work permit for Juan has been rejected when you compare his talent and ability to players who have been granted a work permit on appeal in the past."
Scholes has a point considering that players like Geoff Cameron and Brek Shea have been granted work permits despite having a similar levels of experience as Agudelo. He made is debut with the US National Team in 2010 and despite not being in Klinsmann's plans recently, he does have 17 senior level caps.
Agudelo is not necessarily a free agent at this point as Stoke could still choose to sign him and then loan him out, hoping to apply for a work permit at a later date. They could also walk way from the deal. A return to MLS is a possibility though he made it fairly clear he didn't want to be in the league anymore based on his actions over the past few months. There are plenty of other options overseas if a club -- or clubs -- are interested.