The Azeri Foreign Ministry said its Russian counterpart had sent a note saying it would no longer use the station.
Baku had wanted to increase the annual rent for the facility to $150 million from $7 million under the current agreement. Some media outlets said Baku had raised the price to $300 million.
The two sides negotiated for more than a year over Russia’s desire to continue to rent the Gabala radar station, which was built during Soviet times. The lease expires this month.