Monday's deadline for franchised players to agree to long-term contracts passed at 4 p.m. ET. Despite the deadline, the Bills and Byrd had no contract talks scheduled for Monday, a source close to the talks told ESPN NFL Insider Adam Schefter.
The situation is shaping up as one that could drag well into the preseason, if not longer, the source said.
"We worked very hard to come to a long-term agreement with Jairus, but unfortunately were unable to reach one before today's deadline," Bills general manager Doug Whaley said in a statement. "Our attention will now be focused on a one-year agreement with him and on training camp with our continued efforts to prepare our team for the upcoming season."
The Bills placed the franchise tag on Byrd in March. It is worth $6.9 million for a safety in 2013.
Byrd, 26, has been Buffalo's most consistent defender in recent seasons. A second-round pick in 2009 out of Oregon, he was fourth on the team in tackles in 2012 with 76 and led the team in interceptions with five. He has 18 career interceptions, tied for third-most among NFL players since 2009. His breakout season came as a rookie when he tied for the NFL lead with nine interceptions.
Buffalo finished 26th in the NFL in points allowed and 22nd in yards allowed last season.
Information from ESPN NFL Insider Adam Schefter and The Associated Press was used in this report.