NBA commissioner David Stern canceled the first two weeks of the 2011-12 regular season after several hours of meetings on Monday failed to result in a new labor deal.
Stern said he is canceling all scheduled regular season games through November 14 after the two sides met for seven hours on Monday.
Stern said the last-ditch effort to end the lockout of the players and begin the season on time failed because the two sides are miles apart on a number of key issues that need to be resolved.
"We just have a gulf that separates us," Stern said.
All of the NBA's 114 pre-season games have already been wiped out by the contract dispute.
"Despite extensive efforts, we have not been able to reach a new agreement with the players' union that allows all 30 teams to be able to compete for a championship while fairly compensating our players," the NBA said in a statement.
No new talks have been scheduled but owners and players said they planned to keep in touch.
Stern, deputy commissioner Adam Silver, owners Peter Holt of San Antonio, Glen Taylor of Minnesota and James Dolan of New York, and senior vice president and deputy general counsel Dan Rube represented the owners in talks on Monday. They met with union executive director Billy Hunter, president Derek Fisher of the Los Angeles Lakers and vice president Maurice Evans of the Washington Wizards, and lawyers Jeffrey Kessler and Ron Klempner.
The way it stands now the two sides may end up in court as each have accused the other of unfair labor practices which the National Labor Relations Board is looking into. The owners also filed a lawsuit in US federal court against the players union.
Union brass have so far decided not to decertify like their counterparts with the National Football League. Although the basketball players say they haven't ruled out that option.
The owners locked out the players July 1 when they couldn't reach a deal before the expiration of the old collective bargaining agreement. The NBA's opening night was scheduled for November 1.
The warring sides have met occasionally over the past few weeks as the NBA reportedly continued to insist it wouldn't move beyond the 50-50 split in league revenues that Stern proposed on Tuesday.
The union rejected that, saying players wouldn't resume talks with any preconditions.
Team owners and players have been haggling over how to divide $3.8 billion in annual revenues and over salary cap issues.
The gaps in their positions has been so wide it could now jeopardize the entire 2011-2012 campaign.
The only prior NBA season shortened due to money issues was in 1998-99 when the season was cut to 50 games per club because it took so long to reach a deal.
Only once in North American sports history has an entire season been lost to players and team owners being unable to agree upon financial terms, that being the National Hockey League's lost 2004-2005 campaign.