Reading director of football Nick Hammond said: "We did receive a private offer from Sheffield United for Leroy Lita last week.
"We always try to be open with our players regarding bids officially lodged by other clubs, so it was put to Leroy.
"However we were very pleased that Leroy firmly stated his desire to stay at Reading, and he will not be joining Sheffield United."
Utd are looking for a replacement for James Beattie who they sold to Stoke this week.