The Australian singer, who originally appeared on the ITV show for three series until 2010, is apparently wary of reuniting on TV with former lover Simon Cowell after some of the comments that he has made about her.
The Daily Star quotes a source as saying: "Dannii has never actually said she wanted to return to the show.
"They came to her with an offer, she said no, they came back again, she said no. It's not about money for Dannii.
"She had to seriously think about whether she wanted to work for the man who spoke so degradingly about her and their relationship."
Tabloid reports this morning allege that Minogue declined an offer in the region of £1 million during talks yesterday.
> Dannii Minogue rules out a return to music: 'You can't do everything'
The 40-year-old has been strongly linked with a return to The X Factor following the departure of Kelly Rowland.
Louis Walsh and Gary Barlow have both been confirmed for the 2012 panel, while former N-Dubz member Tulisa Contostavlos is highly expected to be unveiled in the near future.
Photo Gallery - Dannii Minogue's career in pictures:
Copyright: Rex Features
Watch the music video for Dannii Minogue's 1993 hit 'This Is It' below: