Greater Columbus Chamber of Commerce official Becca Hardin said the Development Authority of Columbus was told late last week that their application for the money wasn't approved by the U.S. Department of Commerce.
"As originally submitted, they couldn't support it," Ms. Hardin said. "Our original application was put together so quickly, we were not able to use the federal procurement bidding process."
Columbus could have covered as much as $7.4 million in debt as part of the city's plan to facilitate the expansion project.
NCR announced in June that its world headquarters and 1,275 corporate jobs would be moving to Duluth from Dayton, Ohio. News of Columbus' intentions to use federal funds to purchase the company's building drew political heat from Ohio lawmakers, who said the money would be used to steal jobs from their state.
NCR makes machines used for electronic transactions, such as ATMs and self-service kiosks. The company has already hired about 50 people in Georgia and is holding training classes in the building while it is being renovated.
The plant will bring about 870 jobs to Columbus.
Mayor Jim Wetherington has said the city had a backstop in the event it didn't get money from the Economic Development Administration. If Columbus has to contribute funds for the project, it will borrow the money and pay it back at no more than $1 million per year.
Ms. Hardin said the city isn't giving up on getting federal help, and she is scheduled to lead a group from Columbus to meet with Economic Development Administration officials next week.
The development authority and the chamber of commerce have sought assistance from Republican U.S. Sens. Johnny Isakson and Saxby Chambliss, and from Democrat Rep. Sanford Bishop.
"They have committed to wanting to help us," Mr. Hardin said. "This is right in line with what the Obama administration has talked about to bring jobs back to the U.S."