The manufacturer, which produces brands including Oxo and Mr Kipling, announced in November its plans to sell the dessert brand to concentrate on a more focused group of foods.
Chief executive Gavin Darby, who led the company since 2013, stepped down in January after a shareholder backlash last summer against a strategy which investors argued failed to deliver value.
The company decided to abandon the sale after continued uncertainty over Brexit and a difficult business climate that could have affected the value of the deal.
Ambrosia accounts for fewer than 10% of total revenue sales for Premier Foods.
Analysts have noted that it would only be worth selling the dessert brand if Premier could get enough for it to pay down by a big chunk of its £500m debts.
Premier Foods commented: “A number of parties expressed interest in the business and since the new year the company has been engaged in detailed discussions with a small group of potential buyers.
“The board has concluded that in the present business climate the process will not result in a satisfactory financial outcome. As a result, these discussions have now concluded.”