The group 'Blooms on Bastia' won the tender for the Bastia Hill property in May and had until June 29 to fundraise $1.3 million to purchase the property.
With a total of $135,000 raised, it was only enough for the deposit.
Blooms on Bastia group member Terry Dowdeswell was informed on Friday the request for an extension had been denied.
"We're sad but not shattered. We've done our best and that's all you can do," Dowdeswell said.
"At the moment it's out of our hands, and we respect the vendors' position."
He said the vendors were now in negotiations with another party, and Blooms on Bastia were waiting to see if the new offer is successful.
Dowdeswell said the next step for the Blooms on Bastia group was to make a plan to decide where the funds raised on their givealittle page should go, which totalled $17,950 as of July 4.
The givealittle page states "If we do not raise enough to purchase the property, funds will be used to preserve and protect the garden and for the gardener's residence project at the Bason Botanic Gardens."
Dowdeswell said if the property was to come onto the market again due to the current offer falling through, Blooms on Bastia would still be interested.
"In the meantime, we're looking at plans to preserve what we can of the plants in another way," he said.
"There are plants from the garden that are at various herbariums around the country, and it's possible to bring some of those back to Whanganui."
Blooms on Bastia group member Karen Wrigglesworth said the outcome was both good and bad.
"It's really disheartening in some ways, but at the beginning, all I was hoping for was to save the story, so everything beyond that has been a huge bonus," Wrigglesworth said.
"It makes us think about what other stories are like this that we don't know about."
Dowdeswell said one of the good things to come out of the initiative was it brought several people together for a common cause.
"We've all become good friends, and have come to understand a bit more about Whanganui and the way things work for these sorts of projects."
Wrigglesworth said being able to raise awareness of properties in the community like 115 Mount View Road and the complications that arise with trying to purchase them was also a good outcome.
"It's been a chicken or egg problem. We couldn't apply for funding until we had the property secured, but then we couldn't secure the property until we had funding secured," she said.
Whanganui mayor Hamish McDouall said he had supported the initiative to save the property from the beginning and was disappointed to hear the extension had been denied.
"Council should be expanding our thoughts beyond just bricks and mortar, and the initiative to save the Bastia Hill garden demonstrated why it's needed," McDouall said.
He said there was a focus on preserving heritage sites in the council, but the time needed for the current process of funding projects and lending money was longer than Blooms on Bastia group could afford.
He said the council wanted to make it possible for future projects to access funding more easily, and it was something they would explore in the future.
"It would give the council the ability to be more nimble, which we are somewhat not nimble in this regard."
Dowdeswell will be presenting a submission to the Whanganui District Council's draft Parks and Open Spaces Strategic Plan on July 7.
The submission is for potential funding for future projects that faced the same fundraising time barriers as Blooms on Bastia.
"The submission is not suggesting the council donates the money for such projects, but simply to loan it until funds are found and repayment is made," Dowdeswell said.
The Bastia Hill garden at 115 Mt View Rd belonged to the late Jocelyn and Ian Bell, and prior to that Jocelyn's mother Jean Stevens, an internationally acclaimed plant breeder who received a visit from the Queen Mother in 1966.
Blooms on Bastia wanted to save it from development for the community as a potential heritage garden site and educational environment.