Sources close to the promotion today told MMAjunkie.com (www.mmajunkie.com) that the fight was briefly entertained but did not become a reality after being heavily rumored for the fall, possibly at UFC 136.
Bloody Elbow can independently verify that the fight is no longer under consideration.
The UFC was looking at UFC 136 in October for the bout. That card is expected to be headlined by a featherweight title fight between Jose Aldo and Kenny Florian.
Possible opponents for Sonnen include Brian Stann, Mark Munoz, Chris Leben, and Jorge Santiago.
Machida is left in a quagmire. He's coming off a spectacular knockout of Randy Couture, but a lot of his options are booked up. Jon Jones and Quinton Jackson are scheduled for UFC 135. Rashad Evans and Phil Davis will fight next month, but the winner will likely receive a title shot against the winner of Jones/Jackson. A rubber match with Mauricio Rua might be an option, should he get by Forrest Griffin in Rio de Janeiro.