The 28-year old has spent the last few weeks in South London training with Dennis Wise's team but after seeing the player at close quarters during a pre-season trip to Canada the Lions decided he was not the type of player they were looking to add to their ranks.
Farrelly who has extensive top flight experience following spells with the Wanderers, Aston Villa and Everton left his last club Wigan Athletic at the end of last season having failed to establish himself in the first team at the JJB Stadium.
Ex-England midfielder Ray Wilkins now on the coaching staff at Millwall praised Farrelly's efforts and wished him a successful future at his next destination.
"He is a smashing lad and worked extremely hard but unfortunately Gareth didn't quite offer what we are looking for."