The airline has been the club's main shirt sponsor since 2006 and PSG are seeking more cash, given their star names in Neymar and Kylian Mbappe bring extra glamour to the club.
According to Bloomberg, the deal has become unworkable because the United Arab Emirates has imposed a trade and travel embargo on Qatar.
Emirates have several other shirt sponsorships, including Real Madrid, Arsenal and AC Milan.
The timing of the announcement is particularly uncomfortable, given allegations they racially profiled young players and settled for a reduced punishment with Uefa over Financial Fair Play.
Emirates' current deal with PSG is understood to be worth around £26million a year — but the club are reportedly looking to nearly TREBLE that sum, with an agreement worth £69m.
Meanwhile the astonishing demands made by Kylian Mbappe before he joined Paris Saint-Germain have been revealed – including topping Neymar's wages if he is crowned winner of the Ballon d'Or.
The teenage wonderkid left Monaco for the mega-rich French champions on-loan last season but signed a permanent deal for £162m in the summer.
And in order to sign on the dotted line for PSG the 19-year-old wanted a £48m net profit over his lucrative five-year contract.
According to Football Leaks, the ex-Monaco man also asked for private jet flights so he can travel across the globe without attracting worldwide attention from fans.
But PSG rejected the demand and instead agreed a £27,000-a-month salary to pay his personal staff, a caretaker, a driver and bodyguard.
The report also claims he wanted to become the club's highest paid player if he is crowned the world's best footballer.
That would mean he'd pocket more than Neymar, who earns a staggering £600,000-a-week.
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