Sacramento had recently initiated talks with the Nets, proposing a deal for Williams and second-year forward Mason Plumlee, who was actually the Kings' main target, sources said.
With Plumlee struggling and clashing a bit with new Nets coach Lionel Hollins over the first month of the season, the Kings were hoping he might be available. To compel the Nets into moving Plumlee, they considered taking on Williams, whose contract and history of injuries has scared off many clubs.
Brooklyn, however, has no intention of moving Plumlee, who has surged to average 18 points and 10.2 rebounds over the past six games. With no chance of getting Plumlee, the Kings backed away from Williams.
While talks have slowed, a potential deal for Williams is not completely dead, according to sources. Sacramento was interested in acquiring Rajon Rondo, who was recently traded from Boston to Dallas, so it could remain in the market for a point guard.
One source said he expects talks between the two clubs to continue until the trade deadline in February.
Williams, who has two years and more than $43 million remaining on his contract after this season, has a history with Kings coach Tyrone Corbin, who was an assistant in Utah when Williams enjoyed his finest NBA seasons.
Corbin, who replaced Mike Malone last week, is expected to remain the Kings' coach for the rest of the season as a source said Corbin will be given a legitimate opportunity to coach and stabilize the team.
Kings Interested In Deron Williams Deal
ESPNNewYork.com's Mike Mazzeo has the latest on the possible deal being discussed between the Kings and Nets for PG Deron Williams.