Los Angeles Clippers owner Donald Sterling has pulled his support from a $2bn (£1.2bn) deal to sell the team to former Microsoft CEO Steve Ballmer.
Instead the embattled Mr Sterling will pursue his $1bn (£595m) federal lawsuit against the NBA, his lawyer said.
"From the onset, I did not want to sell the Los Angeles Clippers," the 80-year-old Mr Sterling said.
The Clippers are not for sale, Sterling says The sale was negotiated by his estranged wife Shelly Sterling, co-owner of the franchise, after Mr Sterling's racist remarks to a girlfriend were publicised and the NBA banned him for life.
But he says in his lawsuit that the league violated his constitutional rights because the racist remarks came from an "illegal" recording that publicised comments he made to a girlfriend.
The lawsuit also said the league violated antitrust laws by trying to force a sale.
"I have decided that I must fight to protect my rights," Mr Sterling said.
"While my position may not be popular, I believe that my rights to privacy and the preservation of my rights to due process should not be trampled.
Steve Ballmer had agreed to the deal, which would have been an NBA record "I love the team and have dedicated 33 years of my life to the organisation. I intend to fight to keep the team."
Mr Sterling had agreed to ink the deal and drop the suit last week assuming "all their differences had been resolved", his lawyer said.
But the AP news agency said he decided to not sign the papers after learning the NBA would not revoke its lifetime ban and fine.
"There was never a discussion involving the NBA in which we would modify Mr Sterling's penalty in any way whatsoever. Any suggestion otherwise is complete fabrication," NBA spokesman Mike Bass said.
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