Ownership had become involved and the Timberwolves had given the Heat Butler's medical information before talks fell apart as Minnesota sought to change the details of the trade, the report says.
The Timberwolves had reportedly sought Josh Richardson, 25, in any deal with the Heat, something Miami had finally relented on to make the deal seem like a possibility.
Butler made it clear to Minnesota that he wants to be traded and that Miami was among his preferred destinations. Coach Tom Thibodeau has been unsuccessful in his attempts to change the star forward's mind.
Butler has been away from the team since being given permission to skip media day and has been rehabbing from offseason surgery on his right hand.
Thibodeau, also the vice president of basketball operations in Minnesota, and owner Glen Taylor are in a standoff over Butler's status, with Taylor preferring to end the distraction quickly.
Butler, 29, appeared in 59 games last season for the Timberwolves, averaging 22.2 points, 5.3 rebounds, 4.9 assists and 2.0 steals.
He is entering the fourth season of a five-year, $92.3 million contract he signed with Chicago in 2015, but he can enter the free agent market next summer by opting out of the final year. He is scheduled to earn a base salary of $18.7 million in 2018-19.
In July, Butler reportedly turned down Minnesota's four-year extension offer worth $110 million.
Time is running out to move Butler prior to Minnesota's season opener against the San Antonio Spurs on Oct. 17.
--Field Level Media