The former Leicester Tigers centre cum wing arrived at Kingsholm following Pacific Nations Cup duty and was then required to undergo a fitness test in order to finalise his move to the West Country.
"Part of the agreement was that he passed a medical and a fitness test," Gloucester chairman Tom Walkinshaw told the Gloucester Citizen.
"He couldn't do the fitness test so he couldn't pass the medical. He failed the medical so we didn't sign him, simple as that."
Rabeni has suffered from knee problems in the past but Walkinshaw explained that his latest injury was an entirely new injury and one that would keep him out of action for some time.
"It was a new injury not linked to any of his old knee problems. He was going to require surgery so we have decided not to sign him," added Walkinshaw.
The cancellation of Rabeni's contract now means Gloucester have just Mike Tindall, Eliota Fuimaono-Sapolu and Henry Trinder listed as centres in the senior squad after Olly Barkley, Anthony Allen Matthew Watkins and Jack Adams all left the club earlier this summer.
"Bryan (new head coach Bryan Redpath) will look at it and decide whether we need someone else," explained Walkinshaw.
"But there's no reason to panic and sign someone straight away.
"We have sufficient cover in the position to be going on with. I expect there to be a replacement, but we have no-one specific in mind at the moment."