The Toffees midfielder travelled down to London and was seemingly on the verge of a switch.
But Barkley will now return to Merseyside after opting against a move to the Premier League champions.
Mashiri told Sky Sports: "Well the two clubs agreed a deal of £35m.
"Personal terms were agreed, but after the medical we heard from Paul Martin, Ross Barkley’s agent, that he changed his mind.
"And he wanted to reconsider his position during the January window.
"That is the latest we have been advised.
"He is currently injured so technically he will be with us because he is under contract for another year.
TRANSFER NEWS LIVE: All the latest rumours, gossip and every done deal
"It is a big surprise but that is football."
Barkley is not the first player to turn down Chelsea this summer.
Romelu Lukaku opted to move to Manchester United and Alex Oxlade-Chamberlain snubbed the Blues in favour of a switch to Liverpool.
Chelsea have made four signings this summer.
Antonio Rudiger, Tiemoue Bakayoko, Willy Caballero and Alvaro Morata have all moved to Stamford Bridge.
