A source told TSN Hockey Insider Pierre LeBrun of ESPN.com that Kris Letang's camp informed the Penguins on Thursday night that they were turning down an eight-year contract offer worth about $56 million.
LeBrun added that whether more contract talks are coming or whether the Penguins put Letang on the trade market remains to be seen.
LeBrun was also told by a source that Letang's camp counter-offered with a long-term deal which would pay less than $8 million - but more than $7.5 million - and the Penguins said it was too high.
Rob Rossi of the Pittsburgh Tribune-Review reported on Wednesday that Letang preferred the Toronto Maple Leafs atop a potential list of teams to go to should he be unable to sign an extension with the Penguins.
One year ago, the Penguins traded Jordan Staal to the Carolina Hurricanes after he also declined a long-term contract extension.
Where possible trades are concerned, Letang himself has no final say on who his next team would be.
Rossi told TSN Radio 1050 on Wednesday, "I've been told that if the Penguins couldn't reach some sort of understanding with Letang, and the belief was they wouldn't be able to sign him to some sort of deal, that Toronto has emerged as a preferred landing spot - perhaps by Letang. It would be a place that he would be willing, if dealt, to perhaps sign a long-term deal."