The whole undertaking collapsed after the Greens' representatives on the council turned against the idea.
Eight representatives voted against the plan, with seven representatives voting for it. Supporters included all those from the right-of-centre National Coalition Party (NCP) and most from the small Swedish People's Party (SPP).
Last week, Yle gathered the stances of various groupings on the council towards the Guggenheim project. According to that survey, support for the project was only found among representatives of Mayor Jussi Pajunen's NCP and the SPP.
The chair of the Green delegation, Ville Ylikahri, said he opposed the venture because Helsinki would be liable for all its costs and risks.
He told Yle that the Greens' main reason for opposing the plan was that it would have been too expensive, adding that Finland should focus on cultural exports rather than imports.
Opponents also criticised the handling of the proposal, calling it secretive and rushed. Most of the local art community dismissed the plan as being more motivated by business and tourism interests than actually advancing Finnish contemporary art.
More than 100 artists presented Pajunen with an alternative plan billed as Checkpoint Helsinki.
Minister of Culture Paavo Arhinmäki, who had insisted no state funds would be spent on the venture, said that other replacement projects could bring more added cultural value to Helsinki than a Guggenheim museum. He said he now considers the idea to be dead.