The two leaders will then discuss the situation in a call on Saturday afternoon.
“After one week of intense negotiation in London, the two chief negotiators agreed today that the conditions for an agreement are not met, due to significant divergences on level playing field, governance and fisheries,” the statement said.
A No 10 spokesman said: “We are committed to working hard to try and reach an agreement with the EU and the talks are ongoing.
“There are still some issues to overcome. Time is in very short supply and we are at a very difficult point in the talks.
“What is certain is we will not be able to agree a deal that doesn’t respect our fundamental principles on sovereignty, fishing and control.
“Our negotiating team is working extremely hard in order to bridge the gaps that remain.”
After months of circling round the same key issues, their had been hopes that this weekend would be the point when the two sides would finally make the moves needed to get an agreement over the line.
At the same time there had been an expectation that Mr Johnson and Mrs von der Leyen would have to come together to resolve the most problematic issues.