He told Dale Earnhardt Inc. on Thursday that he had decided to make the switch to another team when his contract expires.
"We worked really hard, but we were never close," Earnhardt said of negotiations with DEI. "I am a little sad, but I am trying to remind myself to be excited about what's ahead."
Earnhardt had asked for 51 percent ownership of the team now run by his stepmother, Teresa. Negotiations on a contract extension began before the season and have been tense all along. Earnhardt's sister, Kelley Earnhardt Elledge, had set a deadline to get the deal done by the end of the month.
Earnhardt has made it clear he wants to be in a Chevrolet, but that loyalty could limit his options next season.
It's also possible that Earnhardt will field his own Nextel Cup team from JR Motorsports, where he runs a Busch Series program and several late model cars out of a brand new shop in Mooresville. Earnhardt scheduled his news conference at that facility.
Although he said at last month's grand opening that he'd like to eventually expand JRM into the Cup series, his sister was taken aback by the remarks. Elledge, who runs JRM and has handled his contract negotiations, later said the duo had no immediate plans for expansion.
At a sponsor appearance Wednesday night, the Atlanta Journal Constitution reported Earnhardt told fans his priority as a team owner is promoting young drivers and mechanics.
"I don't want the company to get too big," he said. "I've got about 70 employees now, and I don't want to get too many more."
There are three Chevrolet teams better than DEI, but Hendrick Motorsports has no room in its stable for Earnhardt.
Hendrick, winner of seven of the past eight Cup races, is already maxed out with four teams but could assist Earnhardt by leasing him engines. Hendrick already leases motors to Ginn Racing and Haas-CNC Racing, and Earnhardt recently got to feel their horsepower when he jumped into Kyle Busch's car during a race last month.
Richard Childress Racing, where the elder Earnhardt won six of his seven championships, always has been considered the most logical place for Junior to go. Childress and Dale Earnhardt were extremely close, and Junior has maintained a relationship with the car owner.
RCR, which owns the No. 3 should Junior ever want to drive it, can add him as the fourth and final team NASCAR permits each owner. It would team him with Kevin Harvick, who replaced the elder Earnhardt following his 2001 death, and has openly invited Junior to join the organization.
It's also possible that RCR would lease JR Motorsports its engines should Earnhardt field his own team. RCR already gives JRM its motors.
The wildcard could be Joe Gibbs Racing, another powerful three-car Chevy team that would pair him with buddies Tony Stewart and Denny Hamlin. Earnhardt and Stewart have worked wonderfully together on restrictor plate tracks, and Earnhardt befriended Hamlin early in his career.
Gibbs is coach of the Washington Redskins, and Earnhardt is die-hard fan. He wore a Redskins cap backward Monday during a test session at Lowe's Motor Speedway, where he expressed frustration over the NASCAR-mandated Car of Tomorrow and admitted DEI can't keep up with Hendrick's COT program.
Earnhardt and Elledge have been adamant their only goal is to help Junior win Cup championships, something he's been unable to do at DEI. He hasn't been a legitimate title contender since 2004. In 2005, he had a horrendous season when Teresa Earnhardt split up his crew, and he failed to make the Chase for the championship.
He rebounded last year by making the Chase, but was never a threat for the title.