The 25-year-old was set to swap Paisley for Edinburgh last summer with Easter Road pair Scott Allan and Drey Wright heading to St Mirren as part of the deal until the clubs ran out time to conclude the agreement on the line.
But Hibs have not reignited their interest in McGrath, who has been linked with both Aberdeen and Birmingham City this month.
Meanwhile, it is understood Hibs were offered the chance to sign Toby Sibbick at the start of the transfer window but turned it down, having already landed their first-choice defensive targets.
Rocky Bushiri and Harry Clarke have both agreed loan deals with the Easter Road side as Shaun Maloney has provided much-needed reinforcements at the back, with the pair identified as ideal for Maloney’s style of play.
Sibbick has been repeatedly linked with Hibs as his time at English Championship side Barnsley appeared to be running out of steam, but after acquiring Clarke on an 18-month deal from Arsenal, and Bushiri from Norwich City on a shorter contract until at the end of the season with an option to buy this summer, the capital club had no interest in the 22-year-old’s services.
As the Evening News reported earlier this month, the former AFC Wimbledon man was part of a wider list drawn up by the club’s recruitment team ahead of the January transfer window, but reports of the Tykes rejecting six-figure offers for Sibbick from Hibs were wide of the mark.