The 24-year-old completed his medical tests at the London club as well but the Blues walked away from negotiations to sign him.
This comes amid their pursuit of Brighton midfielder Moises Caicedo as they aim to beat Liverpool to the deal.
Adams is one player Leeds fans would not have wanted to lose but there was a clause in his deal that left the club powerless.
It seems that now, Chelsea need more money and thus are pulling the plug on this deal with the American coming back to Elland Road.
It will be slightly disappointing for him as he appeared to be keen on moving to Stamford Bridge post the Whites’ relegation.
He would be offered top-flight football, better wages and the chance to compete for trophies in West London.
It remains to be seen if anyone else comes in for Adams as he’s a player who could be useful to most if not all Premier League sides.
Daniel Farke will be hoping that he can convince Adams to stay regardless of the interest shown and commit to Leeds for the upcoming season.