The newly-promoted side had Grujić as part of their squad for a brief spell last campaign, and the Welsh side were eager to have the 22-year-old join the club once again this summer on a season-long loan.
However, Cardiff manager Warnock claims that the Serbia international will remain at Anfield next season due to complications with his contract at Liverpool.
"Grujić looks like he will stay put... I think he would be better off here but it is a contract issue, I understand his point of view," Warnock confirmed in pre-season, quoted by the Liverpool Echo.
"Liverpool have four competitions before Christmas and he can play in those without being named in the 25-man squad.
"I have missed out on a couple of targets waiting for him. It is disappointing as everything was agreed with Liverpool. But sometimes fate intervenes."
Liverpool signed Grujić back in 2016 from Serbian giants Red Star Belgrade, with the midfielder reportedly costing in the region of £6m. Since then the 22-year-old has only made 14 appearances for the club, claiming his only assists during a League Cup win over Tottenham.
Grujić made the same number of appearances for Cardiff last season as he had during the entirety of his Liverpool career. The midfielder also scored his first senior goal since leaving Belgrade, netting the winning goal against Barnsley.