Martinez has been working on plans to bring his team to MotoGP for some time, and appeared to be closing on a deal for 2009.
But the agreement to run a third Kawasaki was dependent on the Aspar team signing Shinya Nakano, who is looking for a new ride after being dropped by Gresini Honda.
Martinez said his Spanish backers were unwilling to go along with this, so the deal fell through.
"The final situation arose due to Kawasaki insisting on a Japanese rider, Nakano, who, from my point of view, is an excellent rider, but we are a Spanish team, and our sponsors want a Spanish rider," he told the official MotoGP website.
"So that's the big problem that we have. It's a real shame, because we were really excited about the project to be in MotoGP in 2009. I have been working on this for nearly two years, but it hasn't been possible."
Despite the collapse of the 2009 Kawasaki deal, Martinez said he remains committed to a MotoGP programme and said there was "no doubt" he would try again for the 2010 season.
"I have been working for two years and I will keep on working to try and make it into MotoGP," said Martinez.
"It's my biggest challenge. In 125 and 250 we have basically achieved all our goals. We will try our best to see if we can finalise a deal with a manufacturer for 2010."
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