The bronze statue, being constructed in Alaska, will be donated to the city of Chicago following its unveiling on Nov. 7, the Chicago Tribune reported Wednesday.
Peyton family members met with Bears representatives earlier this week to see if the team could help persuade the Chicago Park District to allow the statue to be located at Soldier Field.
Chicago Park District officials have told the Payton family the statue would not be in keeping with the preservation of Soldier Field and the area around it as a memorial to war veterans.
In addition, there is concern a Payton statue in that location might diminish other former Bears Hall of Famers, the newspaper says.
Payton died Nov. 1, 1999, of complications from liver cancer.