Aiken, a 17-year-old left-hander out of San Diego's Cathedral Catholic High School, becomes only the third top overall choice in the draft's history not to sign, joining Danny Goodwin in 1971 and Tim Belcher in 1983.
The Astros will now receive the No. 2 pick in next year's draft for their failure to come to terms. Aiken, who has committed to UCLA, will either pitch for the Bruins next spring or has the option to attend junior college in hopes of remaining eligible for the 2015 draft.
Friday's news is the culmination of a stunning turn of events between the Astros and Aiken over the last month. The talented hurler had initially agreed to a deal that contained a $6.5 million bonus just days after the draft, but Houston later reduced its offer to $3.1 million due to concerns over the structure of Aiken's elbow after he took a physical.
If Aiken, the first prep lefty to be taken first overall since the Yankees chose Brien Taylor in 1991, does decide to attend UCLA, he will not be able to re-enter the draft until 2017.
Aiken emerged as a top prospect following a brilliant career at Cathedral Catholic, where he went 18-4 with a 1.09 ERA over three seasons and struck out 111 batters in just 59 2/3 innings as a senior.