The university will offer a more detailed explanation of its decision later Friday.
The issue has been hotly debated on campus for weeks.
A petition has been circulating opposing Allalou’s request, saying exclusive rights to the gym should not be accorded to any specific demographic group.
When she first made the request, Allalou told CBC News that she preferred to work out in a women-only environment.
"I think there are many reasons women would want to work out only with other women. They might feel more comfortable. They might have had bad experiences in the past," said Allalou.
The Students Society of McGill University had supported Allalou’s request.
Vice-president Claire Stewart-Kanigan released a statement Friday saying she was disappointed by the university's decision.
Stewart-Kanigan said that the SSMU had been trying to broker a compromise, but that the university shut down negotiations.
"The action of unilaterally cutting off talks with an advocating student, particularly when steps were being made towards a compromise that could respect all parties’ needs and concerns, is an affront to the right of students to engage with and be treated with respect by their university," said Stewart-Kanigan.
One of McGill’s swimming pools already has hours set aside for women only.