The two sides have been in talks in recent weeks but general manager Kevin Towers said no agreement could be reached. Both he and Montero said they did not want the contract issue to be a distraction as the Diamondbacks defend their NL West crown.
The Diamondbacks avoided arbitration with Montero by signing him to a 1-year, $5.9 million contract. He hit .282 with 18 home runs and 86 RBIs last season. Montero was a late addition to the All-Star team after another player withdrew.
He and Towers appeared together at a brief news conference Wednesday to explain the situation.
Towers would not characterize how close the two sides were.
"I would rather not get into details," he said. "I think the best negotiations are ones that don't end up in the papers. All I'll say is we worked long and hard at it. There was good dialogue, good conversation. We just weren't able to find any common ground."
Montero said he is not disappointed and has no "hard feelings."
"Ultimately I've got a decision to make," the 28-year-old Venezuelan said. "Like I say to them, they're going to be my priority in the offseason regardless. Right now I don't even want to talk about anything else, just prepare for the season."
This is the final year of arbitration eligibility for Montero, so these were his first talks on an extended, big-money deal.
While he said re-signing with Arizona is his "priority," he knows this could be his final season with the Diamondbacks.
"This is a business," Montero said. "If this is my last year, I've got to move on and it's just part of the game."
Towers said "there's certainly still a desire to have Miguel Montero here beyond the 2012 season. We just didn't want it to be a distraction."
"We can't be affected by what goes on with other ballclubs," he said. "The Yankees have had a similar situation come with Russell Martin. We worry about the Diamondbacks and our own business."
Montero is counted on to handle the talented young Arizona rotation, as well as be a significant offensive threat from the left side of the plate.
"At this point I just want to focus on the game, on my pitchers," he said. "The bottom line is I just want to win. Right now I know they've been trying hard. There's not hard feelings right now. I just want to go out there and play."
Manager Kirk Gibson said "everybody knows" the Diamondbacks want Montero to stay and that he's earned the right to be a free agent.
"He's extremely talented, he's extremely important to our team and our pitching staff," Gibson said. "We're happy to have him, keep him healthy for this year and let the process take its course."
Montero said he is confident about the coming season.
Gibson was moved to quote his manager in Detroit, the late Sparky Anderson.
"He once said, 'Give me 25 guys playing for a contract and I'll show you a world champion,'" Gibson said. "So take that analogy."